Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 10/01/2004, Docket: RP04-523-000, Status: Effective

Second Revised Sheet No. 403J Second Revised Sheet No. 403J : Effective

Superseding: First Revised Sheet No. 403J

PRO FORMA

PIPELINE BALANCING AGREEMENT

(Continued)

4.8 Creditworthiness - Southern or Pipeline Operator may make an inquiry into the other

Party's creditworthiness and obtain adequate assurances of each's solvency and ability

to perform under this Agreement. In this regard, upon request, Pipeline Operator

and Southern agree to supply each other with credit information from time to time

including, but not limited to, three (3) credit references and either their most recent

audited or otherwise verified financial statement, annual report, Form 10-K or

alternate credit information sufficient to demonstrate that they will be able to meet

their financial obligations under this Agreement. The Parties acknowledge that

Southern or Pipeline Operator may terminate this Agreement at the end of the

current calendar month upon prior written notice to the other Party hereto if they

do not receive the information sought by the requesting Party which assures that

Party of Pipeline Operator's or Southern's solvency and ability to continue to perform

its obligations under this Agreement.

4.9 Assignability - This Agreement shall not be assignable by either Party.

4.10 Governing Law - The validity and interpretation of this Agreement shall be governed

by the laws of the State of _____________, without giving effect to any conflict of

laws doctrine that would apply the laws of another jurisdiction.

4.11 Superseding Agreement - The terms of this Agreement shall supersede the terms of

any other balancing agreement between Southern and Pipeline Operator with regard

to the allocation of gas at the Interconnection Point and the resolution of the

Monthly Pipeline Imbalance. No modifications or amendments to this Agreement

shall be valid or enforceable unless such modifications or amendments are stated in

writing and validly executed by both Parties.

4.12 Exhibits - Exhibits A and B attached hereto constitute part of this Agreement and

are incorporated herein by reference.

4.13 Notices - Except as otherwise provided herein or in the General Terms and

Conditions applicable to this Agreement, any notice under this Agreement shall be

given to the respective party as provided on Appendix E to the General Terms and Conditions,