Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 01/01/1997, Docket: RP97-125-000, Status: Effective

First Revised Sheet No. 403D First Revised Sheet No. 403D : Effective

Superseding: Original Sheet No. 403d

PRO FORMA

PIPELINE BALANCING AGREEMENT

(Continued)

1.5 Reports on Actual Deliveries - Actual deliveries and receipts at the Interconnection

Point shall be determined by the measured volumes recorded at the Interconnection

Point. Measurement of gas at the Interconnection Point shall be in accordance with

the provisions of the currently effective FERC Gas Tariff of the Interconnection

Point Operator set forth on Exhibit A hereto. Any gas received or delivered at the

Interconnection Point shall be adjusted for variation in Btu content and shall be

reported in Dth's unless the parties mutually agree other wise. The Party that

owns the primary measurement facilities at the Interconnection Point shall (a) allow

the other Party to tie into such equipment to receive accurate electronic

measurement data on a "real time" basis; and (b) provide to the other Party the

measured volumes, adjusted for Btu content, recorded each day at the

Interconnection Point within two business days thereafter, unless the Parties agree

otherwise.

1.6 Capacity Constraints - Each Party shall be responsible for the scheduling and

management of its respective pipeline capacity and pipeline system constraints at the

Interconnection Point. In the event that a capacity constraint occurs on either Party's

pipeline system which results in the curtailment or limitation of quantities through

the Interconnection Point, the Party on whose system the constraint has occurred

shall determine the change in scheduled quantities for its shippers. Such change in

scheduled quantities shall be confirmed in writing pursuant to the provisions of

Paragraph 1.1 above. If the constraint occurs at the Interconnection Point, the Party

that operates the measurement facilities at the Interconnection Point shall be

deemed to have the constraint on its system.

1.7 Operational Integrity - Nothing in this Agreement shall limit Southern's or Pipeline

Operator's ability to mutually agree to take action as may be required to adjust

deliveries or receipts of gas at the Interconnection Point in order to alleviate

conditions which threaten the integrity of either pipeline system.

1.8 Hourly Rate - The Parties agree that confirmed nominations scheduled to be

received and delivered will occur at a uniform hourly rate or at an hourly rate

agreeable to both Parties as communicated by each Party's appropriate confirmation

representative or gas dispatching department.