Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 04/01/1999, Docket: RP98-363-000, Status: Effective

Second Revised Sheet No. 241 Second Revised Sheet No. 241 : Effective

Superseding: First Revised Sheet No. 241

GENERAL TERMS AND CONDITIONS

APPENDIX D

(Continued)

Supply Pool from Receipt Point sources only, but Seller may nominate gas for delivery

therefrom into transportation Service Agreements and another Seller's Tier II Supply

Pool. If Seller has requested a Tier II Supply Pool, as set forth in Section 2.2 of

the General Terms and Conditions, Seller may nominate gas for receipt into such Supply

Pool from Receipt Points and other Sellers' Tier I Supply Pools, but Seller may nominate

gas for delivery therefrom only into transportation Service Agreements.

2.3 If Seller wishes to nominate to receive gas from a third-party Seller's Tier I Supply

Pool, Company will allow such a nomination provided that the third-party Seller submits

a corresponding nomination to deliver gas to Seller from said Tier I Supply Pool.

2.4 On its nomination form, Seller shall provide a balancing priority for all of the

transportation Service Agreements and/or Tier II Supply Pools and associated volumes

served by Seller's Supply Pool to be used by Company to limit the markets served by

such Supply Pool in the event of an interruption or reduction in Seller's supplies.

2.5 On its nomination form, Seller shall also provide a balancing priority for all the

Receipt Points and/or Tier I Supply Pools serving Seller's Supply Pool to be used to

limit the receipts of gas into Seller's Supply Pool in the event of an interruption

or reduction in the markets that Seller is supplying.

2.6 On its nomination form, Seller shall also provide a "capacity priority" for each Receipt

Point serving its Supply Pool. In the event capacity is constrained at any Receipt

Point, Company shall allocate capacity to Seller's Supply Pool at that point by matching

the Tariff-established priorities of the transportation Service Agreements served by Seller's

Supply Pool to the capacity-constrained Receipt Points in the order that the constrained

points were prioritized by Seller. Tier II Supply Pools served by Seller's Tier I Supply

Pool shall be deemed to have the same priority as IT service solely for this purpose.