Southern Natural Gas Company

Seventh Revised Volume No. 1

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

Third Revised Sheet No. 362 Third Revised Sheet No. 362 : Effective

Superseding: Second Revised Sheet No. 362

FORM OF SERVICE AGREEMENT

UNDER RATE SCHEDULE CSS

(Continued)

provisions of Rate Schedule CSS or the parties may agree to a Negotiated Rate for such

services in accordance with the provisions of Rate Schedule CSS. Said discounted rates

or negotiated rates shall be set forth on Exhibit C or Exhibit D, respectively, hereto and

shall take precedence over the charges set forth in Rate Schedule CSS during the period in

which they are in effect.

5.2 The rates and charges provided for under Rate Schedule CSS shall be subject to

increase or decrease pursuant to any order issued by the Commission in any

proceeding initiated by Company or applicable to the services performed

hereunder. Shipper agrees that Company shall, without any further agreement by

Shipper have the right to change from time to time, all or any part of Rate

Schedule CSS or the General Terms and Conditions applicable thereto, including

without limitation the right to change the rates and charges in effect hereunder,

pursuant to Section 4(d) of the Natural Gas Act as may be deemed necessary by

Company, in its reasonable judgment, to assure just and reasonable terms of

service and rates under the Natural Gas Act. It is recognized, however, that once a

Capacity Release Transaction has been awarded, Company cannot increase the

Deliverability Charge or Capacity Charge to be paid by Shipper under that Capacity

Release Transaction, unless in its bid the Acquiring Shipper has agreed to pay a

percentage of the maximum tariff rate in effect and the maximum tariff rate increases

during the term of the Capacity Release Transaction. Nothing contained herein shall

prejudice the rights of Shipper to contest at any time the changes made pursuant to

this Section 5.2, including the right to contest the rates or charges for the services

provided under this Agreement, from time to time, in any rate proceedings by Company

under Section 4 of the Natural Gas Act or to file a

complaint under Section 5 of the Natural Gas Act with respect to such rates or

charges.

ARTICLE VI

MISCELLANEOUS

6.1 This Agreement constitutes the entire Agreement between the parties and no

waiver by Company or Shipper of any default of either party under this

Agreement shall operate as a waiver of any subsequent default whether of a like

or different character.

6.2 The laws of the State of ____________ shall govern the validity, construction,

interpretation, and effect of this Agreement, without giving effect to any conflict of

laws doctrine that would apply the laws of another jurisdiction.

6.3 No modification of or supplement to the terms and provisions hereof shall be or

become effective except by execution of a supplementary written agreement

between the parties.