Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 09/01/1994, Docket: RP94-353-000, Status: Effective

Original Sheet No. 403I Original Sheet No. 403I : Effective

PRO FORMA

PIPELINE BALANCING AGREEMENT

(Continued)

will indemnify and save Pipeline Operator harmless from suits, actions, debts,

accounts, damages, costs, losses and expenses arising from or out of adverse claims

of any or all persons to said gas or to royalties, overriding royalties, taxes, or other

charges thereon or with regard to the allocation of gas on Southern's system

hereunder.

4.2 Governing Bodies - This agreement shall be subject to all applicable laws, Federal

or State, and to all applicable rules, orders, statutes and regulations of any duly

authorized Federal, State or other government agency having jurisdiction.

4.3 Waivers - No waiver by either Party of any one or more defaults by the other in the

performance of this Agreement shall operate or be construed as a waiver of any

future default or defaults, whether of a like or different character.

4.4 Billings and Payments - Bills and payments which are due hereunder shall be

tendered in accordance with the billing and payment terms of the billing Party's

FERC Gas Tariff, unless the Parties agree otherwise.

4.5 Third Party Beneficiaries - No person, firm or corporation which is not a party hereto

shall have any legal or equitable right, remedy or claim under this Agreement or any

provision herein. Nothing herein is intended to or shall establish any third party

beneficiaries to this Agreement.

4.6 Pipeline Operations - Neither Party shall have any obligation to alter its pipeline

pressures, provide compression or modify its pipeline operations to eliminate any

Pipeline Imbalance hereunder.

4.7 Incorporation of Tariff - Unless otherwise stated herein, the General Terms and

Conditions specified in the currently effective Volume No. 1 of Southern's FERC

Gas Tariff shall be incorporated as part of this Agreement. Notwithstanding anything

in this Agreement to the contrary, this Agreement is not intended to modify or waive

any rights or obligations either Party may have under its FERC Gas Tariff, as such

may be revised from time to time.