Southern LNG Inc.

Original Volume No. 1

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Effective Date: 12/01/2001, Docket: CP99-582-004, Status: Effective

Original Sheet No. 23 Original Sheet No. 23 : Superseded







3.1 Liquefied Natural Gas Balance:


(a) The Liquefied Natural Gas Balance (LNG Balance) shall be the quantity of gas held in

storage in liquid form for Customer's account at the particular time. Each customer's

LNG Balance shall be increased for receipts by Southern LNG (excluding boil-off

returning to Customer's vessel(s) during receipt of LNG) pursuant to § 5.9 of this

Rate Schedule and reduced for deliveries pursuant to § 6.2 of this Rate Schedule. As

stated in §§ 5.8 and 6.1(c) of this Rate Schedule, Customer shall have the obligation

to manage Customer's LNG Balance to accommodate receipts or deliveries of gas for

Customer's account.


(b) Boil-Off Gas:


(i) Definitions:


Boil-off gas includes gas (1) boiling off from Southern LNG's unloading and

storage facilities, (2) flashing from the liquid phase to the gaseous phase

during unloading of LNG from Customer's vessel(s), (3) returning to

Customer's vessel(s) during receipt of LNG, and (4) boiling off during the

operation of Southern LNG's process equipment.


(ii) Disposal:


Customer must arrange for the delivery on each day of Customer's share of

boil-off gas (except boil-off gas returning to Customer's vessel(s) during

receipt of LNG). If Customer fails to make all necessary arrangements

(including nomination and confirmation), then Southern LNG shall take title

to the boil-off gas. Customer shall indemnify Southern LNG against any

claim, demand, or action brought as a result of Customer's failure under this

paragraph; provided, however, that Southern LNG shall not take title to, and

will allocate to Customer's Service Agreement, boil-off that enters the

downstream pipeline.