Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 09/22/2004, Docket: RP04-494-000, Status: Effective

Third Revised Sheet No. 242 Third Revised Sheet No. 242 : Effective

Superseding: Second Revised Sheet No. 242

GENERAL TERMS AND CONDITIONS

APPENDIX D

(Continued)

2.7 Seller shall exercise due diligence in monitoring the supply serving its Supply Pool

and shall notify Company promptly of any variations it discovers in its supplies.

ARTICLE III

CREDITWORTHINESS

3.1 If at any time Seller is or becomes insolvent or fails to demonstrate

creditworthiness, Seller must provide Company one of the following forms of

credit to enter into or maintain in effect this Agreement: (a) a security deposit or

other good and sufficient surety, as determined by Company in its reasonable

discretion, in an amount equal to the current Index Price under Section 14 of the General

Terms and Conditions multiplied by Seller's estimated maximum nominated quantity for a three

(3) month period multiplied by up to five percent (5%); or (b) a

guarantee from a creditworthy party that said creditworthy

party will be responsible for payment of all charges or penalties assessed by

Company but not paid by Seller hereunder.

ARTICLE IV

NOTICES

4.1 Except as provided in Section 6.1 herein, notices hereunder shall be given

pursuant to the provisions of Section 18 of the General Terms and Conditions to

a party at the applicable address, telephone number, facsimile machine number or

e-mail addresses provided by the parties on Appendix E to the General Terms and

Conditions or such other addresses, telephone numbers, facsimile machine

numbers or e-mail addresses as the parties shall respectively hereafter designate in writing

from time to time.