##### Table of Contents



As filed with the Securities and Exchange Commission on
    October 25, 2007
 
 
 Registration No. 333-146250
 
 
   UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 
  Amendment No. 1
 
 
 to
 
 Form S-4
 REGISTRATION
    STATEMENT
 UNDER
 THE SECURITIES ACT OF
    1933
  Southern Natural Gas
    Company
 
 Southern Natural Issuing
    Corporation
 
 (Exact name of registrant as
    specified in its charter)
  Delaware

4922

63-0196650(State or other jurisdiction
    of
    incorporation or organization)

(Primary Standard Industrial
    Classification Code Number)

(I.R.S. Employer
    Identification Number)   El Paso Building
    1001 Louisiana Street
    Houston, Texas 77002
    (713) 420-2600(Address, including zip
    code, and telephone number,
    including area code, of registrants principal executive
    offices)

Marguerite Woung-Chapman
    El Paso Building
    1001 Louisiana Street
    Houston, Texas 77002
    (713) 420-2600(Name, address, including
    zip code, and telephone number,
    including area code, of agent for service)   Copies to:
  Charles H. Still, Jr.
    Bracewell & Giuliani LLP
    711 Louisiana Street, Suite 2300
    Houston, Texas 77002
    (713) 221-3309

Lara Mason, Esq.
    El Paso Building
    1001 Louisiana Street
    Houston, Texas 77002
    (713) 420-2600   Approximate date of commencement of proposed sale of the
    securities to the public:
  o
  o
  o
 
 
 
  The Registrants hereby amend this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrants shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Commission,
    acting pursuant to said Section 8(a), may determine.




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The information in
this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.  
 SUBJECT TO COMPLETION, DATED
    OCTOBER 25, 2007
 
  PROSPECTUS
  Southern Natural Gas
    Company
   $500,000,000
  Offer to Exchange
 Registered 5.90% Notes Due
    2017
 for
 All Outstanding
    5.90% Notes Due 2017
  THE EXCHANGE OFFER WILL EXPIRE
    AT 5:00 P.M., NEW YORK
 CITY TIME,
    ON          ,
    2007, UNLESS EXTENDED.
      The
    Notes
    TERMS OF THE EXCHANGE OFFER:
  
    The terms of the New Notes will be substantially identical to
    those of the Old Notes, except that the New Notes will not be
    subject to the transfer restrictions or registration rights
    relating to the Old Notes. The New Notes will represent the same
    debt as the Old Notes, and will be issued under the same
    indenture as the Old Notes.
    Subject to certain customary conditions, which we may waive, the
    exchange offer is not conditioned upon a minimum aggregate
    principal amount of Old Notes being tendered. 
  
    Interest on the New Notes will accrue from October 1, 2007,
    the date of last payment of interest on the Old Notes, at the
    rate of 5.90% per annum, payable semi-annually in arrears on
    each April 1 and October 1, beginning April 1, 2008. 
  
    Each New Note issued in exchange for an Old Note will have the
    same principal amount, optional redemption terms, interest
    payment dates and maturity as the Old Note for which it is
    exchanged.
    You may withdraw tenders of Old Notes at any time prior to the
    expiration of the exchange offer. We do not currently intend to
    extend the exchange offer.
    The exchange of Old Notes for New Notes will not be a taxable
    event for United States federal income tax purposes.
    We will not receive any proceeds from this exchange offer.
    The New Notes will not be listed on any securities exchange or
    the Nasdaq Stock Market, Inc.    PARTICIPATING IN THE EXCHANGE OFFER INVOLVES RISKS. SEE THE
    SECTION ENTITLED RISK FACTORS THAT BEGINS ON
    PAGE 7 FOR A DISCUSSION OF THE RISKS THAT YOU SHOULD
    CONSIDER BEFORE PARTICIPATING IN THE EXCHANGE OFFER.
  Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.




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##### 



TABLE OF
    CONTENTS
  
  
 PageWhere You Can Find More Information


iCautionary Statement Regarding Forward-Looking
    Statements


iiIndustry Terms


iiProspectus Summary


1Risk Factors


7Use of Proceeds


14Selected Historical Financial and Operating
    Data


15Ratio of Earnings to Fixed Charges


16Managements Discussion and Analysis of
    Financial Condition and Results of Operations


17Business


26Management


31Executive Compensation


32Security Ownership of Certain Beneficial Owners
    and Management


52Certain Relationships and Related Party
    Transactions


53The Exchange Offer


54Description of the Notes


62Book-Entry and Settlements; Deposit Procedures


69Plan of Distribution


71Material United States Federal Income Tax
    Considerations


72Legal Matters


76Experts


76Index to Consolidated Financial Statements


F-1Certificate of IncorporationBy-lawsConsent of Ernst & Young LLPConsent of PricewaterhouseCoopers LLPConsent of PricewaterhouseCoopers LLPForm of Letter of TransmittalForm of Guidelines for Certification of Taxpayer Identification NumberForm of Notice of Guaranteed DeliveryForm of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other NomineesForm of Letter to ClientsForm of Exchange Agent Agreement  
     WHERE
    YOU CAN FIND MORE INFORMATION
  Form S-4
  This prospectus incorporates important business and financial
    information about us that is not included in or delivered with
    the prospectus. This information is available without charge to
    holders of the notes upon written or oral request to the
    Corporate Secretary, El Paso Building, 1001 Louisiana
    Street, Houston, Texas 77002, telephone number
    (713) 420-2600.
    In order to obtain timely delivery, you must request documents
    from us no later than five business days before the expiration
    of the exchange offer.
   i




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1-800-SEC-0330 http://www.sec.gov
  We have not authorized anyone to give any information or make
    any representation that differs from, or adds to, the
    information in this document or in our documents that are
    publicly filed with the SEC. Therefore, if anyone does give you
    different or additional information, you should not rely on
    it.
  If you are in a jurisdiction where it is unlawful to offer to
    exchange or sell, or to ask for offers to exchange or buy, the
    securities offered by this document, or if you are a person to
    whom it is unlawful to direct these activities, then the offer
    presented by this document does not extend to you.
  The information contained in this document speaks only as of
    its date unless the information specifically indicates that
    another date applies.
  CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
      INDUSTRY
    TERMS
    /d

= per day

LNG

= liquefied natural gasBBtu

= billion British thermal units

MMcf

= million cubic feetBcf

= billion cubic feet    ii




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PROSPECTUS
    SUMMARY
  This summary highlights some basic information appearing in
    other sections of this prospectus to help you understand our
    business and the exchange offer. This summary does not contain
    all the information that you should consider before exchanging
    Old Notes for New Notes. You should carefully read this
    prospectus to understand fully the terms of the exchange offer
    and the New Notes, as well as the tax and other considerations
    that may be important to you. You should pay special attention
    to the Risk Factors section beginning on page 7
    of this prospectus and the section entitled Cautionary
    Statement Regarding Forward-Looking Statements on page ii.
    You should rely only on the information contained in this
    document. We have not authorized anyone to provide you with
    information that is different. This document may only be used
    where it is legal to sell these securities. The information in
    this document may only be accurate on the date of this document.
    For purposes of this prospectus, unless the context otherwise
    indicates, when we refer to Southern Natural Gas,
    us, we, our,
    ours, or SNG we are describing Southern
    Natural Gas Company, together with its subsidiaries. References
    to El Paso mean El Paso Corporation.
  Our
    Company
        
    Seeking to expand our systems by attracting new customers,
    markets or supply sources while leveraging our existing assets
    to the extent possible;
    Investing in maintenance and pipeline integrity projects to
    maintain the value and ensure the safety of our pipeline systems
    and assets; and
    Recontracting or contracting expiring or available capacity.    The SNG System.
  500 MMcf/d.
  The FGT System. BBtu/d
  LNG Terminal.
 1




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Storage Facilities.
    Recent
    Developments
   
  page F-2 reflect
 
 
  Southern
    Natural Issuing Corporation
 
 
   
  (713) 420-2600.
 2




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Summary
    of the Terms of the Exchange Offer
  Initial Offering of Old Notes
    
    On March 26, 2007, we issued in a private placement $500,000,000
    principal amount of 5.90% Notes due 2017. We refer to these
    notes as the Old Notes in this prospectus.Registration Rights Agreement
    
    Pursuant to the registration rights agreement between us and the
    initial purchasers entered into in connection with the private
    placement of the Old Notes, we agreed to offer to exchange the
    Old Notes for up to $500 million principal amount of
    5.90% Notes due 2017 that are being offered hereby. We
    refer to the notes issued for the Old Notes in this exchange
    offer as the New Notes. We have filed the registration statement
    of which this prospectus is a part to meet our obligations under
    the registration rights agreement. If we fail to satisfy our
    obligations under the registration rights agreement, we will be
    required to pay additional interest to holders of the Old Notes
    under specified circumstances.The Exchange Offer
    
    We are offering to exchange all Old Notes for the same aggregate
    principal amount of the New Notes, which have been registered
    under the Securities Act. The Old Notes may be tendered only in
    $1,000 increments. We will exchange New Notes for all Old Notes
    that are validly tendered and not withdrawn prior to the
    expiration of the exchange offer. We will cause the exchange to
    be effected promptly after the expiration date of the exchange
    offer. The New Notes will evidence the same debt as the Old
    Notes and will be issued under and entitled to the benefits of
    the same indenture that governs the Old Notes. Because we have
    registered the New Notes, the New Notes will not be subject to
    transfer restrictions, and holders of Old Notes that have
    tendered and had their outstanding notes accepted in the
    exchange offer will have no registration rights.If You Fail to Exchange Your Old Notes
    
    If you do not exchange your Old Notes for New Notes in the
    exchange offer, you will continue to be subject to the
    restrictions on transfer provided in the Old Notes and the
    indenture governing those notes. In general, you may not offer
    or sell your Old Notes unless they are registered under the
    federal securities laws or are sold in a transaction exempt from
    or not subject to the registration requirements of the federal
    securities laws and applicable state securities laws.Procedures for Tendering Your Old Notes
    
    If you wish to tender your Old Notes for New Notes, you must: complete and sign the enclosed letter of transmittal
    by following the related instructions, and send the letter of transmittal, as directed in the
    instructions, together with any other required documents, to the
    exchange agent either (1) with the Old Notes to be
    tendered, or (2) in compliance with the specified
    procedures for guaranteed delivery of the Old Notes.Brokers, dealers, commercial banks, trust companies and other
    nominees may also effect tenders by book-entry transfer.
 3




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By executing the letter of transmittal or by transmitting an
    agents message in lieu thereof, you will represent to us
    that, among other things: the New Notes you receive will be acquired in the
    ordinary course of your business; you are not participating, and you have no
    arrangement with any person or entity to participate, in the
    distribution of the New Notes; you are not our affiliate, as defined in
    Rule 405 under the Securities Act, or a broker-dealer
    tendering Old Notes acquired directly from us for resale
    pursuant to Rule 144A or any other available exemption
    under the Securities Act; and if you are not a broker-dealer, that you are not
    engaged in and do not intend to engage in the distribution of
    the New Notes.If your Old Notes are registered in the name of a broker,
    dealer, commercial bank, trust company or other nominee, we urge
    you to contact that person promptly if you wish to tender your
    Old Notes pursuant to this exchange offer. See The
    Exchange Offer  Procedures for Tendering Old
    Notes. Please do not send your letter of transmittal or
    certificates representing your Old Notes to us. Those documents
    should be sent only to the exchange agent. Questions regarding
    how to tender and requests for information should be directed to
    the exchange agent. See The Exchange Offer 
    Exchange Agent.Resale of the New Notes
    
    Except as provided below, we believe that the New Notes may be
    offered for resale, resold and otherwise transferred by you
    without compliance with the registration and prospectus delivery
    provisions of the Securities Act provided that: the New Notes are being acquired in the ordinary
    course of business, you are not participating, do not intend to
    participate, and have no arrangement or understanding with any
    person to participate in the distribution of the New Notes
    issued to you in the exchange offer, you are not our affiliate, and you are not a broker-dealer tendering Old Notes
    acquired directly from us for your account.Our belief is based on interpretations by the staff of the SEC,
    as set forth in no-action letters issued to third parties that
    are not related to us. The SEC has not considered this exchange
    offer in the context of a no-action letter, and we cannot assure
    you that the SEC would make similar determinations with respect
    to this exchange offer. If any of these conditions are not
    satisfied, or if our belief is not accurate, and you transfer
    any New Notes issued to you in the exchange offer without
    delivering a resale prospectus meeting the requirements of the
    Securities Act or without an exemption from registration of your
    New Notes from those
 4




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requirements, you may incur liability under the Securities Act.
    We will not assume, nor will we indemnify you against, any such
    liability. Each broker-dealer that receives New Notes for its
    own account in exchange for Old Notes, where the Old Notes were
    acquired by such broker-dealer as a result of market-making or
    other trading activities, must acknowledge that it will deliver
    a prospectus in connection with any resale of such New Notes.
    See Plan of Distribution.Expiration Date
    
    The exchange offer will expire at 5:00 p.m., New York City
    time,
    on           ,
    2007, unless we decide to extend the expiration date. We do not
    currently intend to extend the exchange offer.Conditions to the Exchange Offer
    
    The exchange offer is not subject to any conditions other than
    that it does not violate applicable law or any applicable
    interpretation of the staff of the SEC.Exchange Agent
    
    We have appointed The Bank of New York Trust Company, N.A.,
    as exchange agent for the exchange offer. You can reach the
    exchange agent at the address set forth on the back cover of
    this prospectus. For more information with respect to the
    exchange offer, you may call the exchange agent at (212)
    815-6331;
    the fax number for the exchange agent is (212)
    298-1915.Withdrawal Rights
    
    You may withdraw the tender of your Old Notes at any time before
    the expiration date of the exchange offer. You must follow the
    withdrawal procedures as described under the heading The
    Exchange Offer  Withdrawal of Tenders.Federal Income Tax Considerations
    
    The exchange of Old Notes for the New Notes in the exchange
    offer will not be a taxable event for U.S. federal income tax
    purposes. See Material United States Federal Income Tax
    Considerations.Acceptance of Old Notes and Delivery of New Notes
    
    We will accept for exchange any and all Old Notes that are
    properly tendered in the exchange offer prior to the expiration
    date. See The Exchange Offer  Procedures for
    Tendering Old Notes. The New Notes issued pursuant to the
    exchange offer will be delivered promptly following the
    expiration date.
 5




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Summary
    of Terms of New Notes
  Issuer
    
    Southern Natural Gas CompanyNew Notes
    
    $500 million aggregate principal amount of 5.90% Notes
    due 2017.Maturity Date
    
    April 1, 2017. 
  Interest Rate
    
    5.90% per annum, accruing from October 1, 2007, the date of
    the last payment of interest on the Old Notes. 
 
  Interest Payment Dates
    
    April 1 and October 1 of each year, beginning April 1, 2008. 
  Optional Redemption
    
    We may redeem the New Notes, in whole or in part, at any time
    prior to their maturity at the redemption price described in
    this prospectus under Description of the Notes 
    Optional Redemption of Notes which will include a
    make-whole premium. The notes will not be subject to any sinking
    fund provision.Ranking
    
    The New Notes will: be our senior unsecured indebtedness, ranking
    equally in right of payment with all of our existing and future
    unsecured senior indebtedness; be senior in right of payment to any of our future
    subordinated indebtedness; be effectively junior to any of our future secured
    indebtedness to the extent of the assets securing such
    indebtedness; and not be guaranteed by any of our subsidiaries,
    unconsolidated affiliates or parent companies, and accordingly,
    will be effectively junior to all existing and future
    indebtedness and other liabilities of our subsidiaries and
    unconsolidated affiliates. See Description of the
    Notes  General.Our consolidated subsidiaries have no outstanding indebtedness.
    We have no secured debt.Covenants
    
    The indenture governing the notes contains covenants, including,
    but not limited to, a covenant limiting the creation of liens
    securing indebtedness. For a more detailed description, see
    Description of the Notes  Covenants.Use of Proceeds
    
    We will not receive any proceeds from the exchange of the
    outstanding Old Notes for the New Notes. See Use of
    Proceeds.Risk Factors
    
    You should read the Risk Factors section beginning
    on page 7, as well as the other cautionary statements
    throughout this prospectus, to ensure you understand the risks
    associated with the exchange of the outstanding Old Notes for
    the New Notes.Further Issuances
    
    We may, from time to time, without notice to or the consent of
    the holders of the New Notes, increase the principal amount of
    this series of notes under the indenture and issue such
    increased principal amount (or any portion thereof), in which
    case any additional notes so issued will have the same form and
    terms (other than the date of issuance and, under certain
    circumstances, the date from which interest thereon will begin
    to accrue), and will carry the same right to receive accrued and
    unpaid interest, as the New Notes previously issued, and such
    additional notes will form a single series with the notes.
 6




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RISK
    FACTORS
  Before you decide to participate in the exchange offer, you
    should read the following risks, uncertainties and factors that
    may adversely affect us.
  Risks
    Related to Our Business
  Our
    success depends on factors beyond our control.
    
    service area competition;
    expiration or turn back of significant contracts;
    changes in regulation and actions of regulatory bodies;
    weather conditions that impact throughput and storage levels;
    price competition;
    drilling activity and availability of natural gas;
    continued development of additional sources of gas supply that
    can be accessed;
    decreased natural gas demand due to various factors, including
    increases in prices and the increased availability or popularity
    of alternative energy sources such as hydroelectric, coal and
    fuel oil;
    availability and increased cost of capital to fund ongoing
    maintenance and growth projects;
    opposition to energy infrastructure development, especially in
    environmentally sensitive areas;
    adverse general economic conditions; and
    unfavorable movements in natural gas prices in supply and demand
    areas.  The
    revenues of our pipeline business are generated under contracts
    that must be renegotiated periodically.
    Fluctuations
    in energy commodity prices could adversely affect our
    business.
   7




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##### Table of Contents




    regional, domestic and international supply and demand;
    availability and adequacy of transportation facilities;
    energy legislation;
    federal and state taxes, if any, on the transportation and
    storage of natural gas;
    abundance of supplies of alternative energy sources; and
    political unrest among oil producing countries.  The
    agencies that regulate us and our customers affect our
    profitability.
        Environmental
    compliance and remediation costs and the costs of environmental
    liabilities could exceed our estimates.
   8




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
    The uncertainties in estimating pollution control and clean up
    costs, including sites where preliminary site investigation or
    assessments have been completed;
    The discovery of new sites or additional information at existing
    sites;
    The uncertainty in quantifying liability under environmental
    laws that impose joint and several liability on all potentially
    responsible parties; and
    The nature of environmental laws and regulations, including the
    interpretation and enforcement thereof.      Our
    operations are subject to operational hazards and uninsured
    risks.
      Four
    of our customers account for a majority of our firm
    transportation capacity.
   9




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The
    expansion of our business by constructing new facilities
    subjects us to construction and other risks that may adversely
    affect our financial results.
    
    our ability to obtain necessary approvals and permits by
    regulatory agencies on a timely basis and on terms that are
    acceptable to us;
    the ability to obtain continued access to sufficient capital to
    fund expansion projects;
    potential changes in federal, state and local statutes and
    regulations, including environmental requirements, that prevent
    a project from proceeding or increase the anticipated cost of
    the project;
    impediments on our ability to acquire rights-of-way or land
    rights on a timely basis on terms that are acceptable to us;
    our ability to construct projects within anticipated costs,
    including the risk that we may incur cost overruns resulting
    from inflation or increased costs of equipment, materials or
    labor, or other factors beyond our control, that may be material;
    lack of anticipated future growth in natural gas supply; and
    lack of transportation, storage or throughput commitments.    Our
    business requires the retention and recruitment of a skilled
    workforce and the loss of employees could result in the failure
    to implement our business plan.
    Risks
    Related to Our Affiliation with El Paso
    Our
    relationship with El Paso and its financial condition
    subjects us to potential risks that are beyond our
    control.
     10




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We are
    a wholly owned subsidiary of El Paso.
    
    our payment of dividends;
    decisions on our financing and capital raising activities;
    mergers or other business combinations;
    our acquisitions or dispositions of assets; and
    our participation in El Pasos cash management program.    Risks
    Related to Citrus Corp.
  FGT
    depends substantially upon a small number of
    customers.
    Important
    actions by Citrus and FGT require approval by both CrossCountry
    Energy, LLC (CrossCountry) and us.
    Risks
    Associated with the Exchange Offer
  If you
    fail to follow the exchange offer procedures, your Old Notes
    will not be accepted for exchange.
   11




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If you
    fail to exchange your Old Notes for New Notes, they will
    continue to be subject to the existing transfer restrictions and
    you may not be able to sell them.
    Risks
    Related to the Notes
  Our
    substantial indebtedness could impair our financial condition
    and our ability to fulfill our debt obligations, including our
    obligations under the notes.
      
    make it more difficult for us to satisfy our obligations with
    respect to the notes and our other indebtedness, which could in
    turn result in an event of default on such other indebtedness or
    the notes;
    impair our ability to obtain additional financing in the future
    for working capital, capital expenditures, acquisitions, general
    corporate purposes or other purposes;
    diminish our ability to withstand a downturn in our business or
    the economy generally;
    require us to dedicate a substantial portion of our cash flow
    from operations to debt service payments, thereby reducing the
    availability of cash for working capital, capital expenditures,
    acquisitions, general corporate purposes or other purposes;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industry in which we operate; and
    place us at a competitive disadvantage compared to our
    competitors that have proportionately less debt.      Our
    existing indebtedness is, and the New Notes will be, subject to
    cross default and cross-acceleration provisions.
   12




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The
    notes will be effectively subordinated to liabilities and
    indebtedness of our subsidiaries and subordinated to any of our
    secured indebtedness to the extent of the assets securing such
    indebtedness.
    Because
    there is no public market for the New Notes, you may not be able
    to resell them.
    
    changes in the overall market for non-investment grade
    securities;
    changes in our financial performance or prospects;
    the prospects for companies in our industry generally;
    the number of holders of the New Notes;
    the interest of securities dealers in making a market for the
    New Notes; and
    prevailing interest rates and general economic conditions. 13




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USE
    OF PROCEEDS
   14




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SELECTED
    HISTORICAL FINANCIAL AND OPERATING DATA
  page F-10 page F-19. page F-2
  Year Ended December 31,



Six Months Ended June 30,2006


2005


2004


2003


2002



2007


2006(In millions, except volumes)Operating Results Data:Operating revenues

$
528


$
477


$
527


$
482


$
429



$
268


$
262Operating expensesOperation and maintenance


193



168



206



185



162




90



94Depreciation, depletion and amortization


55



51



50



47



45




29



27Taxes, other than income taxes


28



30



25



21



20




14



14276



249



281



253



227




133



135Operating income


252



228



246



229



202




135



127Earnings from unconsolidated affiliates


78



80



78



55



55




51



36Other income, net


9



22



9



11



9




11



3Interest and debt expense


(94
)


(93
)


(94
)


(87
)


(57
)



(43
)


(47
)Affiliated interest income


18



11



4



4



8




9



9Income before income taxes


263



248



243



212



217




163



128Income taxes


79



74



74



68



67




50



40Net income

$
184


$
174


$
169


$
144


$
150



$
113


$
88Financial Position Data:Total property, plant and equipment, net

$
2,248


$
2,001


$
1,890


$
1,729


$
1,542



$
2,370Total assets

$
3,393


$
3,190


$
2,963


$
2,773


$
2,788



$
3,596Total long-term debt

$
1,096


$
1,195


$
1,195


$
1,194


$
798



$
1,198Stockholders equity

$
1,644


$
1,454


$
1,278


$
1,109


$
1,566



$
1,748Operating Data:Throughput volumes
    (BBtu/d)(1)


3,177



2,942



3,170



3,082



3,153




3,162



3,105     (1)
    
    Throughput volumes include volumes
    associated with our proportionate share of our 50 percent
    equity interest in Citrus and billable transportation throughput
    volumes for storage injection. 15




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RATIO
    OF EARNINGS TO FIXED CHARGES
  Year Ended December 31,


Six Months Ended June 30,2006


2005


2004


2003


2002


2007


2006Ratio of earnings to fixed charges


3.67
x


3.91
x


3.37
x


2.70
x


3.67
x


4.94
x


3.54
x    16




---



##### Table of Contents



MANAGEMENTS
    DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  page F-1 page F-2.
  Overview
    Percent of TotalType

Description

Revenues in 2006Reservation


Reservation revenues are from customers (referred to as firm
    customers) that reserve capacity on our pipeline system, storage
    facility or LNG terminalling facilities. These firm customers
    are obligated to pay a monthly reservation or demand charge,
    regardless of the amount of natural gas they transport or store,
    for the term of their contracts.

89Usage and Other


Usage revenues are from both firm customers and interruptible
    customers (those without reserved capacity) who pay charges
    based on the volume of gas actually transported, stored,
    injected or withdrawn.

11         Percent of TotalPercent of Total


Reservation


ReservationBBtu/d


Contracted Capacity


Revenues


Revenue(In millions)2007


181



5


$
6



22008


19



1



1



2009


199



6



15



42010


1,505



43



161



472011 and beyond


1,583



45



161



47Total


3,487



100


$
344



100  17




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##### Table of Contents



Results
    of Operations
    Year Ended December 31,


Six Months Ended June 30,2006


2005


2004


2007


2006(In millions, except volume amounts)Operating revenues

$
528


$
477


$
527


$
268


$
262Operating expenses


(276
)


(249
)


(281
)


(133
)


(135
)Operating income


252



228



246



135



127Earnings from unconsolidated affiliates


78



80



78



51



36Other income, net


9



22



9



11



3EBIT


339



330



333



197



166Interest and debt expense


(94
)


(93
)


(94
)


(43
)


(47
)Affiliated interest income


18



11



4



9



9Income taxes


(79
)


(74
)


(74
)


(50
)


(40
)Net income

$
184


$
174


$
169


$
113


$
88Throughput volumes
    (BBtu/d)(1)


3,177



2,942



3,170



3,162



3,105     (1)
    
    Throughput volumes include volumes
    associated with our proportionate share of our 50 percent
    equity interest in Citrus and billable transportation throughput
    volumes for storage injection.  Six
    Months Ended June 30, 2007 Compared to Six Months Ended
    June 30, 2006
    EBITRevenue


Expense


Other


ImpactFavorable/(Unfavorable)(In millions)Expansions

$
9


$
(1
)

$
4


$
12Gas not used in operations and other natural gas sales


3



2







5Impact of Hurricane Katrina






9







9Earnings from Citrus










15



15Service revenues


(6
)










(6
)Project cost






(3
)






(3
)Other(1)






(5
)


4



(1
)Total impact on EBIT

$
6


$
2


$
23


$
31     (1)
    
    Consists of individually
    insignificant items. 18




---



##### Table of Contents



Expansions.
    Gas Not Used in Operations and Other Natural Gas
    Sales.
  Impact of Hurricane Katrina.
  Earnings from Citrus.
  Service Revenues.
  Project Cost.
  Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
    EBITRevenue


Expense


Other


ImpactFavorable/(Unfavorable)(In millions)Higher service revenues

$
26


$



$



$
26Expansions


27



(2
)


(10
)


15Gas not used in operations and other natural gas sales


(2
)


(5
)






(7
)Impact of Hurricane Katrina






(7
)






(7
)Gain on the sale of assets in 2005






(9
)






(9
)Earnings from Citrus










(4
)


(4
)Other(1)






(4
)


(1
)


(5
)Total impact on EBIT

$
51


$
(27
)

$
(15
)

$
9     (1)
    
    Consists of individually
    insignificant items. 19




---



##### Table of Contents



Higher Service Revenues.
  Expansions.
    Gas Not Used in Operations and Other Natural Gas
    Sales.
  Impact of Hurricane Katrina.
  Gain on the Sale of Assets.
  Earnings from Citrus.
 20




---



##### Table of Contents



Year
    Ended December 31, 2005 Compared to Year Ended
    December 31, 2004
    EBITRevenue


Expense


Other


ImpactFavorable/(Unfavorable)(In millions)Gas not used in operations and other natural gas sales

$
(64
)

$
49


$



$
(15
)Higher general and administrative expenses






(8
)






(8
)Hurricanes Katrina and Rita






(8
)






(8
)Gain on sale of assets in 2005






9







9Mainline expansions


11



(1
)


(3
)


7Elba Island expansion










8



8Other(1)


3



(9
)


10



4Total impact on EBIT

$
(50
)

$
32


$
15


$
(3
)     (1)
    
    Consists of individually
    insignificant items.  Gas Not Used in Operations and Other Natural Gas
    Sales.
  Higher General and Administrative
    Expenses.
  Hurricanes Katrina and Rita.
  Gain on the Sale of Assets.
  Mainline Expansions.
 21




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##### Table of Contents



Interest
    and Debt Expense
  Six
    Months Ended June 30, 2007 Compared to Six Months Ended
    June 30, 2006
    Affiliated
    Interest Income
  Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
    Year
    Ended December 31, 2005 Compared to Year Ended
    December 31, 2004
    Income
    Taxes
  Six MonthsYear Ended December 31,


Ended June 30,2006


2005


2004


2007


2006(In millions, except for rates)Income taxes

$
79


$
74


$
74


$
50


$
40Effective tax rate


30
%


30
%


30
%


31
%


31
%     Liquidity
    and Capital Expenditures
  Liquidity
    Overview
     22




---



##### Table of Contents



Debt.
    Capital
    Expenditures
      Six MonthsEndedJune 30,


20072007


Remaining


Total(In millions)Maintenance

$
29
(1)

$
52


$
81Expansions


108



106



214$
137


$
158


$
295     (1)
    
    Amount includes $6 million of
    insurance proceeds received in excess of capital expenditures
    related to hurricanes.  Hurricanes.
  Commitments
    and Contingencies
  Legal
    Proceedings
   23




---



##### Table of Contents



Critical
    Accounting Policies
  and/or
  Cost-Based Regulation. Accounting for the Effects of Certain Types of
    Regulation.
  Accounting for Legal and Environmental
    Reserves.
  Contractual
    Obligations
    2007


2008


2009


2010


2011


Thereafter


Total(In millions)Long-term
    obligations:(1)Principal

$
100


$
100


$



$
400
(2)

$



$
600


$
1,200Interest


94



88



81



64
(2)


46



922



1,295Operating lease
    obligations(1)


3



3



1



1



1







9Other contractual obligations and purchase
    commitments(1)


119



19



10



1



1







150Total contractual obligations

$
316


$
210


$
92


$
466


$
48


$
1,522


$
2,654     (1)
    
    See Notes 6 and 7 to our
    Consolidated Financial Statements beginning on page F-30.(2)
    
    In March 2007, this debt was
    refinanced with the 5.90% Notes due 2017.  New
    Accounting Pronouncements Issued But Not Yet Adopted
  page F-23
 24




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##### Table of Contents



Quantitative
    And Qualitative Disclosures About Market Risk
    June 30, 2007Expected Fiscal Year of Maturityof Carrying Amounts


December 31, 2006Fair


Carrying


Fair2007


2008


Thereafter


Total


Value


Amount


Value(In millions, except for rates)Liabilities:Long-term debt, including current maturities  fixed
    rate

$
48


$
100


$
1,098


$
1,246


$
1,287


$
1,196


$
1,302Average effective interest rate


6.8
%


6.2
%


6.9
%    25




---



##### Table of Contents



BUSINESS
  Overview
    and Strategy
        
    Seeking to expand our systems by attracting new customers,
    markets or supply sources while leveraging our existing assets
    to the extent possible;
    Investing in maintenance and pipeline integrity projects to
    maintain the value and ensure the safety of our pipeline systems
    and assets; and
    Recontracting or contracting expiring or available capacity.    The SNG System.
  500 MMcf/d.
  The FGT System. BBtu/d page F-36, page F-40
  LNG Terminal.
  Storage Facilities.
 26




---



##### Table of Contents



Recent
    Developments
    Markets
    and Competition
         27




---



##### Table of Contents



Customer Information

Contract Information

CompetitionApproximately 270 firm and interruptible customers

Approximately 190 firm transportation contracts. Weighted
    average remaining contract term of approximately six years.

We face strong competition in a number of our key markets. We
    compete with other interstate and intrastate pipelines for
    deliveries to multiple-connection customers who can take
    deliveries at alternative points. Natural gas delivered on our
    system competes with alternative energy sources used to generate
    electricity, such as hydroelectric power, coal and fuel oil. Our
    four largest customers are able to obtain a significant portion
    of their natural gas requirements through transportation from
    other pipelines. Also, we compete with several pipelines for the
    transportation business of their customers. In addition, we
    compete with pipelines and gathering systems for connection to
    new supply sources.Major Customers:Atlanta Gas Light
    Company(1)(959 BBtu/d)

Expire in 2009-2015.Southern Company Services
    (418 BBtu/d)

Expire in 2010-2018.Alabama Gas Corporation
    (413 BBtu/d)

Expire in 2010-2013.Scana Corporation
    (316 BBtu/d)

Expire in 2007-2019.     (1)
    
    Atlanta Gas Light Company is
    currently releasing a significant portion of its firm capacity
    to a subsidiary of Scana Corporation under terms allowed by our
    tariff.  Regulatory
    Environment
    
    rates and charges for natural gas transportation, storage and
    LNG terminalling;
    certification and construction of new facilities;
    extension or abandonment of services and facilities;
    maintenance of accounts and records;
    relationships between pipelines and certain affiliates;
    terms and conditions of services; 28




---



##### Table of Contents




    depreciation and amortization policies;
    acquisition and disposition of facilities; and
    initiation and discontinuation of services.      Environmental
    Employees
    Properties
    Legal
    Proceedings
  Gas Measurement Cases. and/or re: Natural Gas Royalties Qui Tam Litigation,
  Royalty Claim.
  Calpine Corporation (Calpine).
 29




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##### Table of Contents



30




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##### Table of Contents



MANAGEMENT
  Executive
    Officers and Directors
      Name

Age

Position

Officer SinceJames C. Yardley

56

President, Chairman of the Board and Director (Principal
    Executive Officer)

1998John R. Sult

48

Senior Vice President, Chief Financial Officer, and Controller
    (Principal Accounting and Financial Officer)

2005Daniel B. Martin

51

Senior Vice President and Director

2000Norman G. Holmes

51

Senior Vice President, Chief Commercial Officer and Director

1995   James C. Yardley
  John R. Sult
  Daniel B. Martin
  Norman G. Holmes
  www.elpaso.com
 31




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##### Table of Contents



EXECUTIVE
    COMPENSATION
  General
    Compensation
    Discussion and Analysis
  Objectives
    of El Pasos Compensation Program
    Annual
    Process for Determining Total Compensation
    Elements
    of Compensation
  Total Compensation.
  
    Base Salary.  Base salaries are paid for
    ongoing performance throughout the year. Management reviews base
    salaries annually to ensure they are competitive and
    commensurate with each employees job responsibilities and
    the employees performance.
    Annual Cash Incentive Bonuses.  Annual cash
    incentive bonuses are paid to reward performance and the
    achievement of pre-established performance goals. Management
    establishes the annual cash 32




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##### Table of Contents



incentive bonus opportunity for each non-executive officer
    employee at the beginning of the year. Management reviews the
    target level for annual cash incentive bonuses annually to
    ensure that the target opportunities are competitive and
    commensurate with each employees job responsibilities.
    Annual cash incentive bonuses are paid after the end of a
    calendar year once the Compensation Committee has determined
    El Pasos performance (and, where appropriate, the
    performance of its business units) and management has determined
    each employees performance relative to the performance
    goals that were established at the beginning of each year. A
    non-executive officer employees annual cash incentive
    bonus may be lower (including no bonus being paid) than target
    level when target levels of performance are not achieved. A
    non-executive officer employees annual cash incentive
    bonus may exceed the target level (as well as the median range
    of the survey data) in the event of exceptional performance by
    El Paso, a business unit
    and/or the
    individual employee.  
    Long-Term Incentive Awards.  Annual grants of
    long-term incentive awards are in the form of restricted stock
    and stock options. Restricted stock and stock options are
    awarded because these awards tie directly to the performance of
    El Pasos common stock and provide non-executive
    officer employees an incentive to build stockholder value. The
    Compensation Committee believes annual grants of restricted
    stock and stock options provide an effective means of management
    retention because the awards are focused long-term and vest over
    a period of years. The target value of long-term incentive
    awards is allocated approximately 50 percent in restricted
    stock and 50 percent in stock options. The Compensation
    Committee believes this allocation of equity awards is
    appropriate because restricted stock is granted based on both
    company and individual performance and is designed to reward
    employees of El Paso and its subsidiaries for the
    achievement of performance goals. The amount of equity available
    to fund the restricted stock portion of the equity pool is based
    50 percent on corporate achievement of the annual overall
    corporate financial goals and 50 percent on
    El Pasos relative total shareholder return compared
    to its peer group of companies. Beginning in 2007 for 2006
    performance, stock options are not adjusted for either corporate
    or individual performance and are granted at target. The
    Compensation Committee believes this is appropriate because the
    value of stock options is recognized only if El Pasos
    stock price increases thereby creating value for all of
    El Pasos stockholders. An employee will forfeit his
    or her long-term incentive awards if he or she voluntarily
    leaves El Paso prior to vesting or is terminated for cause.  Retirement Benefits.
  Health and Welfare Benefits.
  Perquisites and Personal
    Benefits.
 33




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##### Table of Contents



Employment
    Agreements
    Determination
    of 2006 Annual Base Salary Adjustments and 2006 Target Bonus
    Opportunities
    2006
    Annual Base Salary Adjustments and
    2006 Target Bonus Opportunities
  2006 Target BonusName

2006 Base Salary


OpportunityNorman G. Holmes

$
270,000



45%   Determination
    of Annual Cash Incentive Awards for 2006 Performance
    Performance Goals.
    Corporate Financial Goals

2006 Target Goals(In millions, except per share data)Earnings Per Share

$
0.96Cash Flow from Operations

$
2,530Debt (net of cash)

$
14,100  34




---



##### Table of Contents




    El Pasos and El Pasos business units
    2006 non-financial goals included the achievement of the
    following: (i) certification of compliance with
    El Pasos Code of Business Conduct by 100 percent
    of El Pasos employees, (ii) no material weakness
    in El Pasos internal controls over financial
    reporting and (iii) certain safety goals which included:
    (a) the number of recordable injuries requiring days away
    from work compared with the total number of hours worked
    (Days Away Incident Rate) and (b) the number of
    recordable on-the-job injuries compared with the total number of
    hours worked (Total Recordable Incident Rate).
    For the regulated pipeline business, the 2006 non-financial
    goals also included a minimum of 95 percent
    (1,995 miles) and a target of 100 percent
    (2,100 miles) of El Pasos pipeline miles to be
    successfully in-line inspected as part of El Pasos
    pipeline integrity program.  Funding of the Annual Incentive Bonus
    Pool.
  Funding
    of the
    Annual Incentive Bonus Pool
  El Pasos Performance

Pool FundingTarget Goals Exceeded


150%
(1)Target Goals Met


100%Minimum Threshold


50%
(2)Minimum Threshold Not Met


0%
(3)     (1)
    
    The maximum funding of the annual
    incentive bonus pool is 150 percent for performance above
    target levels with the actual amount of funding to be determined
    by the Compensation Committee based on company performance.(2)
    
    The maximum funding of the annual
    incentive bonus pool is 100 percent for performance above
    the minimum threshold level with the actual amount of funding to
    be determined by the Compensation Committee based on company
    performance.(3)
    
    No annual incentive awards will be
    made if the minimum threshold is not met for at least one of the
    overall corporate financial goals. 35




---



##### Table of Contents



Individual Performance
    Adjustment.
  Individual
    Performance Adjustment
  Individual Rating

Adjustment FactorOutstanding


110 - 150
%Highly Valued


100 - 109
%Opportunity for Development


50 -  60
%Requires Improvement


0
%     Range of
    Cash Incentive Bonuses as a Percentage of Base Salary for
    2006
  Not Met


Minimum


Target


MaximumNorman G. Holmes


0
%


22.5
%


45
%


101.25
%     El Paso Performance.
   36




---



##### Table of Contents



Compensation of Mr. Holmes.
  Target
    vs. Actual
    Annual Cash Incentive Bonuses
    Paid for 2006 Performance
  Target


ActualCash Incentive


Cash IncentiveBonus(1)


Bonus(2)Norman G. Holmes

$
121,500


$
155,610     (1)
    
    The range of potential annual cash
    incentive bonuses for 2006 performance for Mr. Holmes is
    reflected in the Grants of Plan-Based Awards table in the
    Estimated Possible Payments under Non-Equity Incentive
    Plan Awards column.(2)
    
    Annual cash incentive bonuses for
    2006 performance were paid in April 2007.  Determination
    of 2006 and 2007 Long-Term Incentive Awards
     37




---



##### Table of Contents



Funding
    of Portion of Equity Pool
    Based on Total Shareholder Return
    for Equity Grants made in 2006 for 2005 Performance
  Total Shareholder Return

Equity Pool Funding1st Quartile

Funded at 150%2nd Quartile

Funded from 100% to 150% of actual TSR results3rd Quartile

Funded from 0% to
    100%(1)4th Quartile

Funding at 0%     (1)
    
    If El Pasos TSR is below
    the 50th percentile (i.e., third quartile), at least one of the
    pre-established corporate or business unit financial or
    non-financial performance goals must be achieved before any
    equity will be awarded. The actual level of funding is
    determined by the Compensation Committee.     38




---



##### Table of Contents



2007
    Annual Grant of
    Long-Term Incentive Awards
    based on 2006 Performance
  Stock

RestrictedOptions

Stock(#)

(#)Norman G. Holmes


19,949



10,764   Summary
    Compensation Table
    Summary
    Compensation Table
  Change inPensionValue andNonqualifiedNon-Equity

DeferredStock

Option

Incentive

Compensation

All OtherSalary

Bonus

Awards

Awards

Plan

Earnings

Compensation

TotalName and Principal Position

Year

($)

($)

($)(1)

($)(2)

($)(3)

($)(4)

($)(5)

($)Norman G. Holmes


2006


$
235,760


$
0


$
99,140


$
74,478


$
155,610


$
11,086


$
26,392


$
602,466Senior Vice President & 
    Chief Commercial Officer 
    of SNG     (1)
    
    The amount reflected in this column
    is the amount of compensation cost recognized by El Paso in
    2006 for restricted stock granted in 2006 and prior years. The
    calculation of these amounts disregards the estimate of
    forfeitures related to time-based vesting conditions. The grant
    date fair market value of the restricted stock computed in
    accordance with FAS 123(R) used to calculate these amounts
    is the same as that used for El Pasos stock-based
    compensation disclosure in Note 16 to El Pasos
    financial statements included in El Pasos 2006 Annual
    Report on
    Form 10-K
    filed with the SEC on February 28, 2007, and
    El Pasos Annual Reports on
    Form 10-K
    for prior years.(2)
    
    The amount reflected in this column
    is the amount of compensation cost recognized by El Paso in
    2006 for stock options granted in 2006 and prior years. The
    calculation of these amounts disregards the estimate of
    forfeitures related to time-based vesting conditions. The grant
    date fair market value of the stock options computed in
    accordance with FAS 123(R) used to calculate these amounts
    is the same as that used for El Pasos stock-based
    compensation disclosure in Note 16 to El Pasos
    financial statements included in El Pasos 2006 Annual
    Report on
    Form 10-K
    filed with the SEC on February 28, 2007, and
    El Pasos Annual Reports on
    Form 10-K
    for prior years.(3)
    
    The dollar amount in this column
    reflects the annual cash incentive bonus earned for 2006
    performance. Annual cash incentive bonuses are performance-based
    and driven by company and individual performance. This amount
    was paid in April 2007.(4)
    
    The amount in this column reflects
    the annual change in the actuarial present value of
    Mr. Holmes accumulated pension and supplemental pension
    benefits and above-market interest credited to
    Mr. Holmess supplemental Retirement Savings Plan
    account balances. The change in pension value is equal to the
    difference between the actuarial present value at the end of the
    year and the beginning of the year. The change in the actuarial
    present value is calculated using FAS 87 assumptions. The
    end of year amounts used the same assumptions that are used for
    El Pasos pension liability disclosure in Note 14
    to El Pasos financial statements included in
    El Pasos 2006 Annual Report on
    Form 10-K
    filed with the SEC on February 28, 2007, and the beginning
    of year amounts used the same assumptions that are used for
    El Pasos pension liability disclosure in Note 17
    to its financial statements included in its 2005 Annual Report
    on
    Form 10-K
    filed with the SEC on March 7, 2006. The annual change in
    the actuarial present value of Mr. Holmes accumulated
    pension and supplemental pension benefits is $11,082. Effective
    June 2006, interest was credited to the balance of each
    participants supplemental Retirement Savings Plan account
    balance on a monthly basis 39




---



##### Table of Contents



at a rate equal to the average of
    Moodys Seasoned Aaa Corporate Bond Rate and Moodys
    Seasoned Baa Corporate Bond Rate, as published by Moodys
    Investors Services, Inc. It was determined that the rate of
    interest exceeded 120 percent of the applicable federal
    long-term rate in June, July, October, November and December of
    2006. The total amount of the above-market interest credited to
    Mr. Holmes supplemental Retirement Savings Plan
    account balance during 2006 was $4. See the Nonqualified
    Deferred Compensation table and narrative description beginning
    on page 46 of this prospectus for a description of
    Mr. Holmes supplemental Retirement Savings Plan
    benefits.(5)
    
    The compensation reflected in the
    All Other Compensation column for 2006 includes
    company matching contributions to El Pasos Retirement
    Savings Plan, supplemental company matching contributions for
    the Retirement Savings Plan accrued under El Pasos
    2005 Supplemental Benefits Plan, annual executive physicals, a
    fitness center subsidy, and life insurance and accidental
    death & dismemberment insurance premiums, which are
    listed in the table below.  All Other
    Compensation included in the Summary Compensation
    Table
  CompanyMatchingCompany


Accrued








Life InsuranceMatching


Under the








and AccidentalTo the


2005


Annual





Death &Retirement


Supplemental


Executive


Fitness


DismembermentSavings Plan


Benefits Plan


Physicals


Center


Insurance


TotalName

($)(A)


($)(B)


($)(C)


Subsidy(D)


Premium(E)


($)Norman G. Holmes

$
19,800


$
5,506


$
752


$
288


$
46


$
26,392     (A)
    
    The compensation reflected in this
    column for 2006 includes company matching contributions to the
    Retirement Savings Plan.(B)
    
    The compensation reflected in this
    column for 2006 includes supplemental company matching
    contributions for the Retirement Savings Plan which were accrued
    under the 2005 Supplemental Benefits Plan. Supplemental company
    matching contributions for the Retirement Savings Plan are also
    disclosed as registrant contributions in the Nonqualified
    Deferred Compensation table on page 46 of this prospectus.(C)
    
    The amount in this column for 2006
    reflects the cost to El Paso for Mr. Holmes
    annual physical.(D)
    
    The amount in this column for 2006
    reflects the pay to Mr. Holmes for a fitness center subsidy.(E)
    
    The amount in this column for 2006
    reflects the premiums for Mr. Holmes basic life
    insurance and basic accidental death & dismemberment
    insurance.     40




---



##### Table of Contents



Grants of
    Plan-Based Awards Table
    Grants of
    Plan-Based Awards
    During the Year Ended December 31, 2006
  All Other

All OtherStock

OptionEstimated Possible Payouts

Awards:

Awards:



Grant DateUnder Non-Equity Incentive

Number of

Number of

Exercise or

Fair ValuePlan
    Awards(1)

Shares of

Securities

Base Price

of StockThreshold







Stock or

Underlying

of Option

and OptionGrant

Not Met

Minimum

Target

Maximum

Units

Options

Awards

AwardsName

Date

($)

($)

($)

($)

(#)(2)

(#)(3)

($/Sh)(4)

($)(5)Norman G. Holmes


4/3/2006


$
0


$
60,750


$
121,500


$
273,375



6,869










$
83,4934/3/2006























13,888


$
12.155


$
67,103     (1)
    
    These columns show the potential
    value of the payout of the annual cash incentive bonuses for
    2006 performance for Mr. Holmes if the minimum, target and
    maximum performance levels are achieved. The potential payout is
    performance-based and driven by company and individual
    performance. The actual amount of the annual cash incentive
    bonuses paid for 2006 performance is shown in the Summary
    Compensation Table under the Non-Equity Incentive Plan
    Compensation column.(2)
    
    This column shows the number of
    shares of restricted stock granted in 2006 to Mr. Holmes.
    The shares of restricted stock granted time vest in three equal
    annual installments beginning one year from the date of grant.(3)
    
    This column shows the number of
    stock options granted in 2006 to Mr. Holmes. The stock
    options time vest in three equal annual installments beginning
    one year from the date of grant.(4)
    
    This column shows the exercise
    price for the stock options granted during 2006, which was the
    average between the high and low selling prices at which
    El Pasos common stock traded on the date of grant.(5)
    
    This column shows the grant date
    fair value of restricted stock computed in accordance with
    FAS 123R and the grant date fair value of stock options
    computed in accordance with FAS 123R granted to
    Mr. Holmes during 2006. Generally, the grant date fair
    value is the amount expensed in El Pasos financial
    statements over the vesting schedule of the restricted stock and
    stock options.   41




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##### Table of Contents



Expected Term in Years


6.0Expected Volatility


37.83
%Expected Dividends


1.27
%Risk-Free Interest Rate


4.95
%     Dividends Receivedduring 2006 onRestricted StockName

($)Norman G. Holmes

$
3,218   and/or
  Outstanding
    Equity Awards Table
  award-by-award
 42




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##### Table of Contents



Outstanding
    Equity Awards
    at December 31, 2006
  Stock AwardsOption Awards


Number of


Market ValueNumber of Securities








Shares or


of Shares orUnderlying Unexercised


Option





Units of


Units of StockOptions at Fiscal Year-End


Exercise


Option


Stock That


Stock That(#)


Price


Expiration


Have Not Vested


Have Not VestedName

Exercisable


Unexercisable


($)(4)


Date


(#)


($)(8)Norman G. Holmes


7,000






$
43.813



12/4/2007



3,897
(5)

$
59,5465,000







43.875



4/22/2008



8,185
(6)


125,0675,100







27.438



12/3/2008



6,869
(7)


104,95840,000







42.125



10/25/200940,000







62.975



1/29/20112,775







62.975



1/29/201130,000







46.275



8/13/201111,687



11,688
(1)


7.090



4/1/20146,380



19,141
(2)


10.685



4/1/201513,888
(3)


12.155



4/3/2016     (1)
    
    These are stock options that were
    granted as part of the 2004 annual grant of long-term incentive
    awards and time vest in four equal annual installments beginning
    one year from the date of grant, with remaining vesting dates on
    April 1, 2007 and April 2, 2008.(2)
    
    These are stock options that were
    granted as part of the 2005 annual grant of long-term incentive
    awards and time vest in four equal annual installments beginning
    one year from the date of grant, with remaining vesting dates on
    April 1, 2007, April 1, 2008 and April 1, 2009.(3)
    
    These are stock options that were
    granted as part of the 2006 annual grant of long-term incentive
    awards and time vest in three equal annual installments
    beginning one year from the date of grant, with vesting dates on
    April 3, 2007, April 3, 2008 and April 3, 2009.(4)
    
    The average between the high and
    low selling prices at which El Pasos common stock
    traded on the grant date is used as the exercise price (or
    strike price) for stock options. No cash is realized until the
    shares received upon exercise of an option are sold.(5)
    
    These are shares of restricted
    stock that were granted as part of the 2004 annual grant of
    long-term incentive awards and time vest in three equal annual
    installments beginning one year from the date of grant, with
    remaining vesting dates on April 1, 2007.(6)
    
    These are shares of restricted
    stock that were granted as part of the 2005 annual grant of
    long-term incentive awards and time vest in three equal annual
    installments beginning one year from the date of grant, with
    remaining vesting dates on April 1, 2007 and April 1,
    2008.(7)
    
    These are shares of restricted
    stock that were granted as part of the 2006 annual grant of
    long-term incentive awards and time vest in three equal annual
    installments beginning one year from the date of grant, with
    vesting dates on April 3, 2007, April 3, 2008 and
    April 3, 2009.(8)
    
    The values represented in this
    column have been calculated by multiplying $15.28, the closing
    price of El Pasos common stock on December 29,
    2006 (the last trading day of 2006) by the number of shares
    of stock.  Option
    Exercises and Stock Vested Table
   43




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##### Table of Contents



Option
    Exercises and Stock Vested
    During Fiscal Year 2006
  Option Awards


Stock AwardsNumber of Shares


Value Realized


Number of Shares


Value RealizedAcquired on Exercise


on Exercise


Acquired on Vesting


on VestingName

(#)


($)


(#)


($)(1)Norman G. Holmes


0


$
0


$
10,407


$
128,893     (1)
    
    The values represented in this
    column for restricted stock have been calculated by multiplying
    the per share fair market value of the underlying shares on the
    vesting date by the number of shares of restricted stock that
    vested.  Pension
    Benefits
    Pension
    Benefits
    as of December 31, 2006
  Number of Years


Present Value of


Payments DuringCredited Service


Accumulated Benefit


Last Fiscal YearName

Plan Name


(#)(1)


($)(2)


($)Norman G. Holmes


Pension Plan



24


$
486,781


$
0Supplemental
    Benefits Plan



26


$
336,628


$
02005 Supplemental
    Benefits Plan



2


$
0


$
0     (1)
    
    Credited service shown for
    Mr. Holmes was 21.25 years as of December 31,
    2004 for his Sonat Transition Benefit (as described below).(2)
    
    The present value of
    Mr. Holmes accumulated pension benefits in this
    column reflects a 5.75 percent discount rate and
    September 30, 2006 measurement date. The calculations
    reflect Mr. Holmes earliest unreduced retirement age.
    Mr. Holmes has a Sonat Transition Benefit (as described
    below) and would be eligible for an unreduced early retirement
    benefit at age 62.  5-Year
 44




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##### Table of Contents



Age Plus Service

Pay Credit PercentageLess than 35


4
%35 to 49


5
%50 to 64


6
%65 and over


7
%       Form 10-K
  and/or
 45




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##### Table of Contents



and/or
  Nonqualified
    Defined Contribution and
    Other Nonqualified Deferred Compensation Plans
    Nonqualified
    Deferred Compensation
    as of December 31, 2006
  Registrant

Aggregate

AggregateContributions in

Earnings in

Balance at LastLast Fiscal Year

Last Fiscal Year

Fiscal Year EndName

($)(1)

($)

($)(2)Norman G. Holmes

$
5,506


$
427


$
15,418     (1)
    
    The amounts in this column are
    reported as compensation to the officers in the Summary
    Compensation Table in the All Other Compensation
    column as supplemental company matching contributions for the
    Retirement Savings Plan which were accrued under the 2005
    Supplemental Benefits Plan. See footnote 5 to the Summary
    Compensation Table beginning on page 39 of this prospectus.(2)
    
    Of the totals in this column,
    $5,506 was reported as compensation in the Summary Compensation
    Table included in this prospectus.    Potential
    Payments upon Termination or Change in Control
   46




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##### Table of Contents



Potential
    Payments upon Termination or Change in Control
    Assuming Termination Event Occurs
    on December 31, 2006
  Payments
    made upon Voluntary Termination
    Payments
    made upon Voluntary Termination
  RetirementSupplemental


Savings


SupplementalPension


Pension


Plan


RSP


EquityBenefits


Benefits


Benefits


Benefits


Awards


TotalName

($)(1)(2)


($)(2)


($)


($)


($)(3)


($)Norman G. Holmes

$
462,651


$
292,295


$
318,923


$
5,933


$
125,032


$
1,204,834     (1)
    
    A participant in
    El Pasos Pension Plan may elect to receive his or her
    qualified pension benefit in the form of a single lump sum
    payment if his or her vested balance is less than or equal to
    $100,000. The amount in this column reflects a lump sum payment
    even though Mr. Holmes vested qualified pension
    benefit is greater than $100,000.(2)
    
    The amounts in these columns may
    differ from the amounts in the Pension Benefits table due to
    several factors, including the use of different assumptions, a
    measurement date of December 31, 2006, and the timing of
    commencement of payment.(3)
    
    Unvested restricted stock and stock
    options are forfeited in the event of a voluntary termination.
    This column shows the value of vested stock options held by
    Mr. Holmes calculated using the difference between $15.28,
    the closing price of El Pasos common stock on
    December 29, 2006 (the last trading day of the year) and
    the applicable exercise price for each stock option.  Incremental
    Payments made upon Involuntary Termination without
    Cause
   47




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##### Table of Contents



Incremental
    Payments made upon Involuntary Termination without
    Cause
  El Paso CorporationSeverance Pay PlanContinuedSeverance

Medical

EquityPayment

Benefits

Awards

TotalName

($)

($)

($)(1)

($)Norman G. Holmes

$
270,000


$
2,379


$
117,702


$
390,081     (1)
    
    This column shows the value of
    shares of restricted stock that vest on a pro-rata basis in the
    event of an involuntary termination without cause calculated
    using $15.28, the closing price of El Pasos common
    stock on December 29, 2006 (the last trading day of the
    year).  Incremental
    Payments made upon Retirement
    Incremental
    Payments made upon Death
    Incremental
    Payments made upon Death
  Supplemental

Survivor

Equity AwardsPension

Pension

Benefit

Stock

RestrictedBenefits

Benefits

Coverage

Options

Stock

TotalName

($)

($)

($)

($)(1)

($)(2)

($)Norman G. Holmes

$
462,651


$
292,295


$
270,000


$
227,078


$
289,571


$
1,541,595     (1)
    
    This column shows the value of
    stock options that become fully vested and exercisable in the
    event of death calculated using $15.28, the closing price of
    El Pasos common stock on December 29, 2006 (the
    last trading day of the year).(2)
    
    This column shows the value of
    shares of restricted stock that become fully vested in the event
    of death calculated using $15.28, the closing price of
    El Pasos common stock on December 29, 2006 (the
    last trading day of the year). 48




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##### Table of Contents



Incremental
    Payments made upon Disability
    Incremental
    Payments made upon Disability
  Equity AwardsDisability

Stock

RestrictedIncome

Options

Stock

TotalName

($)(1)

($)(2)

($)(3)

($)Norman G. Holmes

$
135,000


$
227,078


$
117,702


$
479,780     (1)
    
    In the event of an officers
    permanent disability, disability income would be payable on a
    monthly basis as long as the executive officer qualifies as
    permanently disabled. The amounts in this column assume
    disability income is paid to the executive officer for a period
    of one year.(2)
    
    This column shows the value of
    stock options that become fully vested and exercisable in the
    event of disability calculated using $15.28, the closing price
    of El Pasos common stock on December 29, 2006
    (the last trading day of the year).(3)
    
    This column shows the value of
    shares of restricted stock that vest on a pro-rata basis in the
    event of disability calculated using $15.28, the closing price
    of El Pasos common stock on December 29, 2006
    (the last trading day of the year).  Incremental
    Payments made upon Termination with Cause
    Incremental
    Payments made upon a Change in Control of
    El Paso
   49




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##### Table of Contents



gross-up gross-up
  Incremental
    Payments made upon a Change in Control of El Paso
  2004 Key Executive








Gross-UpSupplemental


Severance Protection Plan


Equity Awards


PaymentPension


Severance


Bonus


Medical


Stock


Restricted


for ExciseBenefits


Payment


Payment


Benefits


Options


Stock


Taxes


TotalName

($)


($)


($)


($)


($)(1)


($)(2)


($)


($)Norman G. Holmes

$
0


$
391,500


$
121,500


$
9,515


$
227,078


$
289,571


$
0


$
1,039,164     (1)
    
    This column shows the value of
    stock options that become fully vested and exercisable in the
    event of a change in control of El Paso calculated using
    $15.28, the closing price of El Pasos common stock on
    December 29, 2006 (the last trading day of the year).(2)
    
    This column shows the value of
    shares of restricted stock that become fully vested in the event
    of a change in control of El Paso calculated using $15.28,
    the closing price of El Pasos common stock on
    December 29, 2006 (the last trading day of the year).   50




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51




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##### Table of Contents



SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    Amount and Nature ofTitle of Class

Name

Beneficial Ownership


Percent of ClassCommon Stock

El Paso
    Corporation(1)


1,000 shares



100
%1001 Louisiana Street
    Houston, Texas 77002     (1)
    
    We are a direct wholly-owned
    subsidiary of El Paso Corporation.    Shares of


Shares





Percentage ofCommon


Underlying


Total Shares


Total SharesStock


Options


of Common


of CommonOwned


Exercisable


Stock


StockDirectly or


Within


Beneficially


BeneficiallyName of Beneficial Owner

Indirectly


60
    Days(1)


Owned


Owned(2)James C. Yardley


176,947



273,280



450,227




*John R. Sult


54,657



33,413



88,070




*Daniel B. Martin


123,889



242,565



366,454




*Norman G. Holmes


71,522



164,796



236,318All directors and executive officers as a group (four persons)


427,015



714,054



1,141,069




*     *
    
    Less than 1%.(1)
    
    The shares indicated represent
    stock options granted under El Pasos current or
    previous stock option plans, which are currently exercisable or
    which will become exercisable within 60 days of
    August 28, 2007. Shares subject to options cannot be voted.(2)
    
    Based on 700,543,326 shares
    outstanding as of July 31, 2007. 52




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##### Table of Contents



CERTAIN
    RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
  Cash Management Program.
  Other Notes Receivable.
  Accounts Receivable Sales Program.
  Taxes.
    Affiliate Revenues and Expenses.
      Year Ended December 31,


Six Months Ended June 30,2006


2005


2004


2007


2006(In millions)Revenues from affiliates

$
9


$
7


$
10


$
3


$
5Operation and maintenance expenses from
    affiliates(1)


65



74



66



35



34     (1) Includes
    expenses related to a long-term storage contract with an
    affiliate.
 53




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##### Table of Contents



THE
    EXCHANGE OFFER
  Exchange
    Terms
   
   
  
    any New Notes that you receive will be acquired in the ordinary
    course of your business;
    you are not participating, and have no arrangement or
    understanding with any person or entity to participate, in the
    distribution of the New Notes;
    you are not our affiliate, as defined in
    Rule 405 under the Securities Act, or a broker-dealer
    tendering Old Notes acquired directly from us for resale
    pursuant to Rule 144A or any other available exemption
    under the Securities Act; and
    if you are not a broker-dealer, that you are not engaged in and
    do not intend to engage in the distribution of the New Notes.      We make no recommendation to you as to whether you should
    tender or refrain from tendering all or any portion of your
    existing Old Notes into this exchange offer. In addition, no one
    has been authorized to make this recommendation. You must make
    your own decision whether to tender into this exchange offer
    and, if so, the aggregate amount of Old Notes to tender after
    reading this prospectus and the letter of transmittal and
    consulting with your advisors, if any, based on your financial
    position and requirements.
  Expiration
    Date; Extensions; Termination; Amendments
      
    to delay our acceptance of Old Notes for exchange;
    to terminate the exchange offer if any of the conditions set
    forth under  Conditions of the Exchange
    Offer exist; 54




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##### Table of Contents




    to waive any condition to the exchange offer;
    to amend any of the terms of the exchange offer; and
    to extend the expiration date and retain all Old Notes tendered
    in the exchange offer, subject to your right to withdraw your
    tendered Old Notes as described under
     Withdrawal of Tenders.  Rule 14e-1
        Resale of
    New Notes
    
    you are acquiring New Notes in the ordinary course of your
    business;
    you are not participating, and have no arrangement or
    understanding with any person to participate, in the
    distribution of the New Notes;
    you are not our affiliate within the meaning of
    Rule 405 under the Securities Act; and
    you are not a broker-dealer who purchased Old Notes directly
    from us for resale pursuant to Rule 144A or any other
    available exemption under the Securities Act.    
    you cannot rely on the interpretation of the staff of the SEC
    set forth in those letters, and
    you must comply with the registration and prospectus delivery
    requirements of the Securities Act in connection with a
    secondary resale transaction and that such a secondary resale
    transaction must be covered by an effective registration
    statement containing the selling security holder information
    required by Item 507 or 508, as applicable, of
    Regulation S-K.   55




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##### Table of Contents



Acceptance
    of Old Notes for Exchange
      
    delay acceptance for exchange of Old Notes tendered under the
    exchange offer, subject to
    Rule 14e-1
    under the Exchange Act, which requires that an offeror pay the
    consideration offered or return the securities deposited by or
    on behalf of the holders promptly after the termination or
    withdrawal of a tender offer, or
    terminate the exchange offer and not accept for exchange any Old
    Notes not theretofore accepted for exchange, if any of the
    conditions set forth below under  Conditions of
    the Exchange Offer have not been satisfied or waived by us
    or in order to comply in whole or in part with any applicable
    law. In all cases, New Notes will be issued only after timely
    receipt by the exchange agent of (i) certificates
    representing Old Notes, or confirmation of book-entry transfer,
    (ii) a properly completed and duly executed letter of
    transmittal, or a manually signed facsimile thereof or an
    agents message (as defined below in
     Procedures for Tendering Old Notes 
    Tendering Old Notes Held Through Depository
    Trust Company) instead of a Letter of Transmittal,
    and (iii) any other required documents. For purposes of the
    exchange offer, we will be deemed to have accepted for exchange
    validly tendered Old Notes, or defectively tendered Old Notes
    with respect to which we have waived such defect, if, as and
    when we give oral, confirmed in writing, or written notice to
    the exchange agent. Promptly after the expiration date, we will
    deposit the New Notes with the exchange agent, who will act as
    agent for the tendering holders for the purpose of receiving the
    New Notes and transmitting them to the holders. The exchange
    agent will deliver the New Notes to holders of Old Notes
    accepted for exchange after the exchange agent receives the New
    Notes.  Rule 14e-1
      Procedures
    for Tendering Old Notes
   56




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##### Table of Contents



Tender
    of Old Notes Held Through Depository
    Trust Company
      Tender
    of Old Notes Held in Certificated Form
    
    the exchange agent must receive at its address set forth in this
    prospectus a properly completed and validly executed letter of
    transmittal, or a manually signed facsimile thereof, together
    with any signature guarantees and any other documents required
    by the instructions to the letter of transmittal, and
    the exchange agent must receive certificates for tendered Old
    Notes at such address, or such Old Notes must be transferred
    pursuant to the procedures for book-entry transfer described
    below.    Letters of Transmittal and Old Notes should be sent only to
    the exchange agent, and not to us or to DTC.
  The method of delivery of Old Notes, Letters of Transmittal
    and all other required documents to the exchange agent is at the
    election and risk of the holder tendering Old Notes. Delivery of
    such documents will be deemed made only when actually received
    by the exchange agent. If such delivery is by mail, we suggest
    that the holder use properly insured, registered mail with
    return receipt requested, and that the mailing be made
    sufficiently in advance of the expiration date of the exchange
    offer to permit delivery to the exchange agent prior to such
    date. No alternative, conditional or contingent tenders of Old
    Notes will be accepted.
  Signature
    Guarantee
    
    the letter of transmittal is signed by the registered holder of
    the Old Notes tendered therewith, or by a participant in one of
    the book-entry transfer facilities whose name appears on a
    security position listing it as the owner of those Old Notes, or
    if any Old Notes for principal amounts not tendered are to be
    issued directly to the holder, or, if tendered by a participant
    in one of the book-entry transfer facilities, any Old Notes for
    principal amounts not tendered or not accepted for exchange are
    to be credited to the participants account at the
    book-entry transfer facility, and neither the Special
    Issuance Instructions nor the Special Delivery
    Instructions box on the letter of transmittal has been
    completed, or
    the Old Notes are tendered for the account of an eligible
    institution. 57




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##### Table of Contents



Rule 17Ad-15
  Book-Entry
    Transfer
  However, although delivery of Old Notes may be
    effected through book-entry transfer into the exchange
    agents account at DTC, (i) a properly completed and
    validly executed Letter of Transmittal, or a manually signed
    facsimile thereof or (ii) an agents message (as
    defined above in  Procedures for Tendering Old
    Notes  Tendering Old Notes Held Through Depository
    Trust Company) instead of the Letter of Transmittal,
    must be received by the exchange agent at one of its addresses
    set forth in this prospectus on or prior to the expiration date
    of the exchange offer, or else the guaranteed delivery
    procedures described below must be complied with.
  Guaranteed
    Delivery
            
    your tender is made by or through an eligible
    institution; and
    on or prior to the expiration date of the exchange offer, the
    exchange agent has received from the eligible institution a
    properly completed and validly executed notice of guaranteed
    delivery, by manually signed facsimile transmission, mail or
    hand delivery, in substantially the form provided with this
    prospectus. The notice of guaranteed delivery must:         58




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##### Table of Contents



Other
    Matters
    
    certificates for (or a timely book-entry confirmation with
    respect to) your Old Notes,
    a properly completed and duly executed letter of transmittal or
    facsimile thereof with any required signature guarantees, or, in
    the case of a book-entry transfer, an agents
    message, and
    any other documents required by the letter of transmittal.  Alternative, conditional or contingent tenders of Old Notes
    will not be considered valid. We reserve the absolute right to
    reject any or all tenders of Old Notes that are not in proper
    form or the acceptance of which, in our opinion, would be
    unlawful. We also reserve the right to waive any defects,
    irregularities or conditions of tender as to particular Old
    Notes.
      Withdrawal
    of Tenders
      
    the exchange agent must receive a written notice of withdrawal
    at one of the addresses set forth below under
     Exchange Agent, or
    you must comply with the appropriate procedures of DTCs
    automated tender offer program system.    
    specify the name of the person who tendered the Old Notes to be
    withdrawn, and
    identify the Old Notes to be withdrawn, including the principal
    amount of the Old Notes.       59




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##### Table of Contents



Conditions
    of the Exchange Offer
  Rule 14e-1
  Transfer
    Taxes
    
    delivery of the New Notes
    and/or
    certificates for Old Notes for principal amounts not exchanged,
    are to be made to any person other than the record holder of the
    Old Notes tendered;
    tendered certificates for Old Notes are recorded in the name of
    any person other than the person signing any letter of
    transmittal; or
    a transfer tax is imposed for any reason other than the transfer
    and exchange of Old Notes to us or our order,    Consequences
    of Failing to Exchange
    
    as set forth in the legend printed on the Old Notes as a
    consequence of the issuance of the Old Notes pursuant to the
    exemptions from, or in transactions not subject to, the
    registration requirements of the Securities Act and applicable
    state securities laws; and
    otherwise set forth in the offering circular distributed in
    connection with the private offering of the Old Notes.    Accounting
    Treatment
   60




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##### Table of Contents



Exchange
    Agent
          By Mail/ Hand/ Overnight Delivery:
  c/o The
     
  
  815-6331
 298-1915
 61




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##### Table of Contents



DESCRIPTION
    OF THE NOTES
 
   
   
   
  General
    
    are our general unsecured obligations; 
  
    rank equally with all of our other existing and future senior,
    unsecured and unsubordinated debt; and 
 
  
    rank senior to any of our future subordinated debt. 
 
   
  Principal,
    Maturity and Interest
 
   
 62




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##### Table of Contents




    accrue at the rate of 5.90% per year accruing from
    October 1, 2007, the date of the last payment of interest
    on the Old Notes; 
 
  
    be payable semiannually in arrears on April 1 and October 1 of
    each year, commencing April 1, 2008; 
  
    be payable to the person in whose name the notes are registered
    at the close of business on the relevant March 15 and September
    15 (whether or not a business day) preceding the applicable
    interest payment date;
    be computed on the basis of a
    360-day year
    comprised of twelve
    30-day
    months; and
    be payable on overdue interest to the extent permitted by law at
    the same rate as interest is payable on principal.    Denominations
    Optional
    Redemption of Notes
      Rule 14e-1
  Additional
    Notes
    Sinking
    Fund
   63




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##### Table of Contents



Consolidation,
    Merger or Sale
    Modification
    of Indenture
    Events of
    Default
    
    default in the payment of any installment of interest on the
    notes when due, continued for 30 days;
    default in the payment of principal or premium, if any, on the
    notes when due;
    default in the payment or satisfaction of any sinking fund
    obligation with respect to the notes when due;
    failure to observe or perform any other covenant (other than a
    covenant included in the indenture for the benefit of any series
    of debt securities other than the notes) for 90 days, or
    30 days in certain cases, after notice by the trustee or by
    the holders of 25% in principal amount of the outstanding notes;
    certain events of default on other funded indebtedness of us or
    our restricted subsidiaries; or
    certain events of bankruptcy, insolvency or reorganization with
    respect to us or our restricted subsidiaries.     64




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##### Table of Contents



Covenants
    
    pay the principal of, and interest and any premium on, the notes
    when due;
    maintain a place of payment;
    deliver a report to the trustee at the end of each fiscal year
    reviewing our obligations under the indenture;
    file with the trustee copies of the annual reports and of the
    information, documents and other reports which the Company may
    be required to file with the SEC; and
    deposit sufficient funds with any paying agent (or if the
    Company is acting as its own paying agent, set aside, segregate
    and hold in trust sufficient funds) on or before the due date
    for any principal, interest or premium.  Limitation on Liens.
  
    purchase money mortgages and preexisting mortgages (whether or
    not assumed) on acquired property;
    liens on property acquired or constructed by us or a restricted
    subsidiary and created within one year after the later of the
    completion of the acquisition or construction or the
    commencement of operation of the project;
    liens of our restricted subsidiaries outstanding at the time
    they become restricted subsidiaries;
    liens created by us or our restricted subsidiaries to secure
    funded indebtedness of ours or any restricted subsidiary which
    in the aggregate does not exceed 15% of our consolidated
    net tangible assets, as defined in the indenture;
    liens on certain equipment, inventory and contract rights;
    any lien on coal, geothermal resources, natural gas, liquefied
    natural gas or synthetic fuel owned by us or any restricted
    subsidiary;
    liens securing short-term indebtedness;
    various public, governmental grantors liens and
    encumbrances;
    liens arising in connection with production payments, reserved
    interests and other similar transactions;
    leases and easements; and
    various other liens.    Definitions
    Adjusted Treasury Rate
 65




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##### Table of Contents



Comparable Treasury Issue
  Comparable Treasury Price
  Independent Investment Banker
  Make-Whole Price
    360-day 30-day
    Reference Treasury Dealer
  Reference Treasury Dealer Quotations
  Restricted subsidiary
  Defeasance
    and Covenant Defeasance
   66




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##### Table of Contents



Methods
    of Receiving Payments on the Notes
    Paying
    Agent and Registrar for the Notes
    Governing
    Law
    Notices
   
  No
    Personal Liability of Officers, Directors, Employees, Partners
    or Stockholders
 
 
   
 67




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##### Table of Contents



Concerning
    the Trustee
   68




---



##### Table of Contents



BOOK-ENTRY
    AND SETTLEMENT; DEPOSITARY PROCEDURES
      non-U.S. securities non-U.S. securities www.dtcc.com www.dtc.org
       69




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70




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##### Table of Contents



PLAN
    OF DISTRIBUTION
    
    our affiliate within the meaning of Rule 405
    under the Securities Act;
    a broker-dealer that acquired Old Notes directly from us; or
    a broker-dealer that acquired Old Notes as a result of
    market-making or other trading activities without compliance
    with the registration and prospectus delivery provisions of the
    Securities Act;        and/or
     71




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##### Table of Contents



MATERIAL
    UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
      
    dealers in securities or currencies;
    traders in securities;
    U.S. holders whose functional currency is not the
    U.S. dollar;
    persons holding notes as part of a hedge, straddle, conversion
    or other synthetic security or integrated
    transaction;
    certain U.S. expatriates;
    financial institutions;
    insurance companies;
    entities that are tax-exempt for U.S. federal income tax
    purposes; and
    partnerships and other pass-through entities.    We encourage you to consult your own tax advisor regarding
    the particular U.S. federal, state and local and foreign
    income and other tax consequences of the exchange offer and of
    owning and disposing of the notes that may be applicable to
    you.
  The
    Exchange Offer
    U.S.
    Holders
    
    an individual citizen or resident of the U.S.;
    a corporation or other entity classified as a corporation for
    U.S. federal income tax purposes created or organized in or
    under the laws of the U.S. or of any political subdivision
    of the U.S., including any state;
    an estate, the income of which is subject to U.S. federal
    income taxation regardless of the source of that income; or 72




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
    a trust, if, in general, a U.S. court is able to exercise
    primary supervision over the trusts administration and one
    or more U.S. persons, within the meaning of the Internal
    Revenue Code, have the authority to control all of the
    trusts substantial decisions, or the trust has a valid
    election in effect under applicable Treasury regulations to be
    treated as a U.S. person.  Payments
    of Interest
      Market
    Discount
    Amortizable
    Premium
    Sale
    or Other Disposition of Notes
    
    the amount realized on the sale or other disposition, less any
    amount attributable to accrued interest, which will be taxable
    in the manner described under  Payments of
    Interest; and
    your adjusted tax basis in the notes.    Information
    Reporting And Backup Withholding
    
    to any payments made to you of interest on your notes, and
    to payment of the proceeds of a sale or other disposition of
    your notes before maturity,     73




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##### Table of Contents



Non-U.S.
    Holders
  non-U.S. holder. non-U.S. holder
  U.S.
    Federal Withholding Tax
    
    you do not, directly or indirectly, actually or constructively,
    own 10% or more of the total combined voting power of all
    classes of our stock entitled to vote;
    you are not a controlled foreign corporation for
    U.S. federal income tax purposes that is related, directly
    or indirectly, to us through sufficient stock ownership (as
    provided in the Internal Revenue Code); and
    you certify as to your foreign status by providing a properly
    executed
    Form W-8BEN
    or appropriate substitute form to us or our paying agent, or a
    securities clearing organization, bank or other financial
    institution that holds customers securities in the
    ordinary course of its trade or business and holds your notes on
    your behalf and that certifies to us or our paying agent under
    penalties of perjury that it, or the bank or financial
    institution between it and you, has received from you your
    signed, written statement and provides us or our paying agent
    with a copy of this statement.    Form W-8BEN Form W-8ECI
  U.S.
    Federal Income Tax
    
    in the case of gain, you are an individual who is present in the
    United States for 183 days or more during the taxable year
    of the sale or other taxable disposition of your notes and
    specific other conditions are present; or
    the income or gain is effectively connected with your conduct of
    a U.S. trade or business, or, if a U.S. income tax
    treaty applies, is generally attributable to a
    U.S. permanent establishment maintained by you.  Form W-8ECI
 74




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##### Table of Contents



Backup
    Withholding and Information Reporting
  non-U.S. holder
  Form W-8BEN non-U.S. person non-U.S. office non-U.S. broker non-U.S. office
  
    is a United States person as defined in the Internal Revenue
    Code;
    derives 50% or more of its gross income in specific periods from
    the conduct of a trade or business in the United States;
    is a controlled foreign corporation for
    U.S. federal income tax purposes; or
    is a foreign partnership that, at any time during its taxable
    year, has more than 50% of its income or capital interests owned
    by U.S. persons or is engaged in the conduct of a
    U.S. trade or business,  non-U.S.
   75




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LEGAL
    MATTERS
    EXPERTS
       76




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##### Table of Contents



INDEX
    TO CONSOLIDATED FINANCIAL STATEMENTS
  PagePRO FORMA FINANCIAL STATEMENTSSouthern Natural Gas Company (General Partnership)Unaudited Pro Forma Consolidated Financial
    StatementsIntroduction


F-2Balance Sheet as of June 30, 2007


F-3Statement of Income for the Six Months Ended
    June 30, 2007


F-4Statement of Income for the Six Months Ended
    June 30, 2006


F-5Statement of Income for the Years Ended
    December 31, 2006, 2005 and 2004


F-6Notes


F-9HISTORICAL FINANCIAL STATEMENTSInterim Period Financial Statements (Unaudited)Southern Natural Gas Company and SubsidiariesCondensed Consolidated Statements of Income and
    Comprehensive Income for the three and six months ended
    June 30, 2007 and 2006


F-10Condensed Consolidated Balance Sheets as of
    June 30, 2007 and December 31, 2006


F-11Condensed Consolidated Statements of Cash Flows
    for the six months ended June 30, 2007 and 2006


F-12Notes to Condensed Consolidated Financial
    Statements


F-13Annual Financial Statements (Audited)Southern Natural Gas Company and SubsidiariesReports of Independent Registered Public
    Accounting Firms


F-17Consolidated Statements of Income and
    Comprehensive Income for the years ended December 31, 2006,
    2005 and 2004


F-19Consolidated Balance Sheets as of
    December 31, 2006 and 2005


F-20Consolidated Statements of Cash Flows for the
    years ended December 31, 2006, 2005 and 2004


F-21Consolidated Statements of Stockholders
    Equity for the years ended December 31, 2006, 2005 and
    2004


F-22Notes to Consolidated Financial Statements


F-23Schedule II  Valuation and
    Qualifying Accounts


F-39Citrus Corp.Report of Independent Registered Public
    Accounting Firm


F-40Consolidated Balance Sheets as of
    December 31, 2006 and 2005


F-41Consolidated Statements of Income for the years
    ended December 31, 2006, 2005 and 2004


F-42Consolidated Statements of Stockholders
    Equity for the years ended December 31, 2006, 2005 and
    2004


F-43Consolidated Statements of Comprehensive Income
    for the years ended December 31, 2006, 2005 and 2004


F-44Consolidated Statements of Cash Flows for the
    years ended December 31, 2006, 2005 and 2004


F-45Notes to Consolidated Financial Statements


F-46  F-1




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SOUTHERN
    NATURAL GAS COMPANY
    UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
    As of June 30, 2007 and
    for the Six Months Ended June 30, 2007 and 2006, and
    the Years Ended December 31, 2006, 2005 and 2004
  Introduction
    Regulation S-X.
   F-2




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SOUTHERN
    NATURAL GAS COMPANY
  UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
 As of
    June 30, 2007
 
  
 SNG


Pro Forma


SNGHistorical


Adjustments


As Adjusted(In millions)ASSETSCurrent assetsAccounts receivable, net

$
28


$
(6
)(a)

$
22Other


30



(6
)(a)


19(5
)(e)Total current assets


58



(17
)


41Property, plant and equipment, net


2,370



(296
)(a)


2,074Other assetsInvestments in unconsolidated affiliates


671



(565
)(b)


106Notes receivable from affiliates


412



468
(d)


524(356
)(e)Regulatory assets


53



(20
)(a)


33Other


32



2
(a)


34Total assets

$
3,596


$
(784
)

$
2,812LIABILITIES AND EQUITYCurrent liabilitiesAccounts payable

$
74



(4
)(a)

$
48(22
)(e)Current maturities of long-term debt


48







48Taxes payable


83



(28
)(a)


12(43
)(e)Other


38







38Total current liabilities


243



(97
)


146Long-term debt, less current maturities


1,198







1,198Other liabilitiesDeferred income taxes


342



(55
)(a)


(287
)(e)Other


65



(2
)(a)


54(9
)(e)Commitments and contingenciesStockholders equity/partners capital


1,748



(237
)(a)


1,414(565
)(b)468
(d)Total liabilities and equity

$
3,596


$
(784
)

$
2,812  
 
   
 F-3




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SOUTHERN
    NATURAL GAS COMPANY
  UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
 For the
    Six Months Ended June 30, 2007
 
  
 SNG


Pro Forma


SNGHistorical


Adjustments


As Adjusted(In millions)Operating revenues

$
268


$
(34
)(c)

$
234Operating expensesOperation and maintenance


90



(16
)(c)


74Depreciation and amortization


29



(3
)(c)


26Taxes, other than income taxes


14



(4
)(c)


10133



(23
)


110Operating income


135



(11
)


124Earnings from unconsolidated affiliates


51



(43
)(c)


8Other income, net


11



(1
)(c)


10Interest and debt expense


(43
)


(1
)(c)


(44
)Affiliated interest income, net


9



7
(f)


16Income before income taxes


163



(49
)


114Income taxes


50



(50
)(e)


Net income

$
113


$
1


$
114  
 
   
 F-4




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
 For the
    Six Months Ended June 30, 2006
 
  
 SNG


Pro Forma


SNGHistorical


Adjustments


As Adjusted(In millions)Operating revenues

$
262


$
(31
)(c)

$
231Operating expensesOperation and maintenance


94



(10
)(c)


84Depreciation and amortization


27



(3
)(c)


24Taxes, other than income taxes


14



(2
)(c)


12135



(15
)


120Operating income


127



(16
)


111Earnings from unconsolidated affiliates


36



(29
)(c)


7Other income, net


3



(1
)(c)


2Interest and debt expense


(47
)


(1
)(c)


(48
)Affiliated interest income, net


9



6
(f)


15Income before income taxes


128



(41
)


87Income taxes


40



(40
)(e)


Net income

$
88


$
(1
)

$
87  
 
   
 F-5




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
 For the
    Year Ended December 31, 2006
 
  
 SNG


Pro Forma


SNGHistorical


Adjustments


As Adjusted(In millions)Operating revenues

$
528


$
(65
)(c)

$
463Operating expensesOperation and maintenance


193



(24
)(c)


169Depreciation and amortization


55



(6
)(c)


49Taxes, other than income taxes


28



(4
)(c)


24276



(34
)


242Operating income


252



(31
)


221Earnings from unconsolidated affiliates


78



(62
)(c)


16Other income, net


9



(2
)(c)


7Interest and debt expense


(94
)


(1
)(c)


(95
)Affiliated interest income, net


18



9
(f)


27Income before income taxes


263



(87
)


176Income taxes


79



(79
)(e)


Net income

$
184


$
(8
)

$
176  
 
   
 F-6




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  UNAUDITED
    PRO FORMA CONSOLIDATED STATEMENT OF INCOME
 For the
    Year Ended December 31, 2005
 
  
 SNG


Pro Forma


SNGHistorical


Adjustments


As Adjusted(In millions)Operating revenues

$
477


$
(40
)(c)

$
437Operating expensesOperation and maintenance


177



(21
)(c)


156Depreciation and amortization


51



(4
)(c)


47Gain on sale of long-lived assets


(9
)






(9
)Taxes, other than income taxes


30



(5
)(c)


25249



(30
)


219Operating income


228



(10
)(c)


218Earnings from unconsolidated affiliates


80



(66
)(c)


14Other income, net


22



(14
)(c)


8Interest and debt expense


(93
)


(4
)(c)


(97
)Affiliated interest income, net


11



12
(f)


23Income before income taxes


248



(82
)


166Income taxes


74



(74
)(e)


Net income

$
174


$
(8
)

$
166  
 
   
 F-7




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SOUTHERN
    NATURAL GAS COMPANY
  UNAUDITED
    PRO FORMA CONSOLIDATED STATEMENT OF INCOME
 For the
    Year Ended December 31, 2004
 
  
 SNG


Pro Forma


SNGHistorical


Adjustments


As Adjusted(In millions)Operating revenues

$
527


$
(42
)(c)

$
485Operating expensesOperation and maintenance


206



(20
)(c)


186Depreciation and amortization


50



(4
)(c)


46Taxes, other than income taxes


25



(2
)(c)


23281



(26
)


255Operating income


246



(16
)


230Earnings from unconsolidated affiliates


78



(65
)(c)


13Other income, net


9



(6
)(c)


3Interest and debt expense


(94
)


(1
)(c)


(95
)Affiliated interest income, net


4



8
(f)


12Income before income taxes


243



(80
)


163Income taxes


74



(74
)(e)


Net income

$
169


$
(6
)

$
163  
 
   
 F-8




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO UNAUDITED PRO FORMA
 CONSOLIDATED
    FINANCIAL STATEMENTS
 
 
  Southern
    Natural Gas Company Historical
 
 
   
 
  Pro Forma
    Adjustments
 
 
  Asset
    Distributions
 
 
   
 
   
 
   
 
   
 
  Change
    in Legal Structure
 
 
   
 
   
 
   
 
  Other
 
 
   
 F-9




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
    INCOME
  Quarter Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(In millions)(Unaudited)Operating revenues

$
131


$
127


$
268


$
262Operating expensesOperation and maintenance


49



47



90



94Depreciation and amortization


15



14



29



27Taxes, other than income taxes


8



6



14



1472



67



133



135Operating income


59



60



135



127Earnings from unconsolidated affiliates


25



23



51



36Other income, net


4







11



3Interest and debt expense


(21
)


(24
)


(43
)


(47
)Affiliated interest income


5



5



9



9Income before income taxes


72



64



163



128Income taxes


22



20



50



40Net income


50



44



113



88Other comprehensive income


1



1



1



1Comprehensive income

$
51


$
45


$
114


$
89    F-10




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
  June 30,


December 31,2007


2006(In millions, exceptshare amounts)(Unaudited)ASSETSCurrent assetsCash and cash equivalents

$



$
Accounts and notes receivableCustomer


9



9Affiliates


17



33Other


2



3Materials and supplies


13



12Deferred income taxes


5



9Other


12



14Total current assets


58



80Property, plant and equipment, at cost


3,736



3,652Less accumulated depreciation and amortization


1,366



1,404Total property, plant and equipment, net


2,370



2,248Other assetsInvestments in unconsolidated affiliates


671



695Notes receivable from affiliate


412



307Other


85



631,168



1,065Total assets

$
3,596


$
3,393LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payableTrade

$
18


$
36Affiliates


33



16Other


23



16Current maturities of long-term debt


48



100Taxes payable


83



51Accrued interest


26



30Other


12



8Total current liabilities


243



257Long-term debt, less current maturities


1,198



1,096Other liabilitiesDeferred income taxes


342



360Other


65



36407



396Commitments and contingenciesStockholders equityCommon stock, par value $1 per share; 1,000 shares
    authorized, issued and outstanding






Additional paid-in capital


340



340Retained earnings


1,412



1,304Accumulated other comprehensive loss


(4
)


Total stockholders equity


1,748



1,644Total liabilities and stockholders equity

$
3,596


$
3,393    F-11




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
  Six Months EndedJune 30,2007


2006(In millions)(Unaudited)Cash flows from operating activitiesNet income

$
113


$
88Adjustments to reconcile net income to net cash from operating
    activitiesDepreciation and amortization


29



27Deferred income taxes


16



8Earnings from unconsolidated affiliates, adjusted for cash
    distributions


25



(5
)Other non-cash income items


(5
)


(1
)Asset and liability changes


40



(5
)Net cash provided by operating activities


218



112Cash flows from investing activitiesAdditions to property, plant and equipment


(137
)


(104
)Net change in notes receivable from affiliate


(105
)


(14
)Other






6Net cash used in investing activities


(242
)


(112
)Cash flows from financing activitiesNet proceeds from issuance of long-term debt


494



Payment to retire long-term debt


(470
)


Net cash provided by financing activities


24



Net change in cash and cash equivalents






Cash and cash equivalentsBeginning of period






End of period

$



$
    F-12




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
  1.
    Basis of
    Presentation and Significant Accounting Policies  Basis of
    Presentation
    Significant
    Accounting Policies
    Accounting for Uncertainty in Income Taxes. Accounting for Uncertainty in Income Taxes. Accounting for
    Income Taxes,
  2.
    Income
    Taxes     F-13




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    3.
    Debt    4.
    Commitments
    and Contingencies  Legal
    Proceedings
  Gas Measurement Cases. and/or re: Natural Gas Royalties Qui Tam Litigation,
  Royalty Claim.
  Calpine Corporation (Calpine).
   F-14




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Environmental
    Matters
      5.
    Retirement
    Benefits  Employers Accounting for
    Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB Statements No. 87,
    88, 106, and 132(R) Employers Accounting for Postretirement Benefits Other
    Than Pensions,
  6.
    Investments
    in Unconsolidated Affiliates and Transactions with
    Affiliates  Investments
    in Unconsolidated Affiliates
    Quarter Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(In millions)Operating results data:Operating revenues

$
69


$
70


$
129


$
128Operating expenses


28



28



56



57Income from continuing operations and net
    income(1)


26



22



50



36     (1)
    
    The difference between our
    proportionate share of our equity investments net income
    and our earnings from unconsolidated affiliates is due primarily
    to the excess purchase price amortization related to Citrus and
    differences between the estimated and actual equity earnings on
    our investments. F-15




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Transactions
    with Affiliates
  Cash Management Program.
  Other Notes Receivable.
  Accounts Receivable Sales Program.
  Taxes.
    Affiliate Revenues and Expenses.
 Quarter Ended

Six Months EndedJune 30,

June 30,2007

2006

2007

2006(In millions)Revenues from affiliates

$
1


$
3


$
3


$
5Operation and maintenance expenses from
    affiliates(1)


18



16



35



34     (1)
    
    Includes expenses related to a
    long-term storage contract with an affiliate. F-16




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##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
          Employers Accounting for Defined Benefit
    Pension and Other Postretirement Plans  An Amendment
    of FASB Statements No. 87, 88, 106, and 132(R).
      F-17




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
          F-18




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##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  CONSOLIDATED
    STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
  Year Ended December 31,2006


2005


2004(In millions)Operating revenues

$
528


$
477


$
527Operating expensesOperation and maintenance


193



177



206Depreciation, depletion and amortization


55



51



50Gain on sale of long-lived assets






(9
)


Taxes, other than income taxes


28



30



25276



249



281Operating income


252



228



246Earnings from unconsolidated affiliates


78



80



78Other income, net


9



22



9Interest and debt expense


(94
)


(93
)


(94
)Affiliated interest income


18



11



4Income before income taxes


263



248



243Income taxes


79



74



74Net income


184



174



169Other comprehensive income


1



2



Comprehensive income

$
185


$
176


$
169    F-19




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  CONSOLIDATED BALANCE SHEETS
  December 31,2006


2005(In millions, except share amounts)ASSETSCurrent assetsCash and cash equivalents

$



$
Accounts receivableCustomer, net of allowance of $1 in 2005


9



58Affiliates


33



Other


3



5Materials and supplies


12



12Deferred income taxes


9



9Other


14



17Total current assets


80



101Property, plant and equipment, at cost


3,652



3,369Less accumulated depreciation, depletion and amortization


1,404



1,368Total property, plant and equipment, net


2,248



2,001Other assetsInvestments in unconsolidated affiliates


695



697Notes receivable from affiliate


307



339Other


63



521,065



1,088Total assets

$
3,393


$
3,190LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payableTrade

$
36


$
40Affiliates


16



17Other


16



12Current maturities of long-term debt


100



Taxes payable


51



67Accrued interest


30



30Other


8



11Total current liabilities


257



177Long-term debt, less current maturities


1,096



1,195Other liabilitiesDeferred income taxes


360



320Other


36



44396



364Commitments and contingenciesStockholders equityCommon stock, par value $1 per share; 1,000 shares
    authorized, issued and outstanding






Additional paid-in capital


340



340Retained earnings


1,304



1,120Accumulated other comprehensive loss






(6
)Total stockholders equity


1,644



1,454Total liabilities and stockholders equity

$
3,393


$
3,190    F-20




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2006


2005


2004(In millions)Cash flows from operating activitiesNet income

$
184


$
174


$
169Adjustments to reconcile net income to net cash from operating
    activitiesDepreciation, depletion and amortization


55



51



50Deferred income tax expense


37



19



26Gain on sale of long-lived assets






(9
)


Earnings from unconsolidated affiliates, adjusted for cash
    distributions


2



45



(8
)Other non-cash income items


(3
)


(8
)


(3
)Asset and liability changesAccounts receivable


19



18



3Accounts payable


(6
)


18



3Taxes payable


(14
)


6



Other, net


(16
)


(6
)


(23
)Net cash provided by operating activities


258



308



217Cash flows from investing activitiesAdditions to property, plant and equipment


(298
)


(177
)


(199
)Net change in notes receivable affiliates


32



(168
)


(18
)Proceeds from the sale of assets


3



32



Net change in restricted cash


5



5



(1
)Other










1Net cash used in investing activities


(258
)


(308
)


(217
)Net change in cash and cash equivalents










Cash and cash equivalentsBeginning of period










End of period

$



$



$
    F-21




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  AccumulatedAdditional





Other


TotalCommon Stock


Paid-in


Retained


Comprehensive


StockholdersShares


Amount


Capital


Earnings


Income (Loss)


Equity(In millions, except share amounts)January 1, 2004


1,000


$



$
340


$
777


$
(8
)

$
1,109Net income














169







169December 31, 2004


1,000







340



946



(8
)


1,278Net income














174







174Other comprehensive income


















2



2December 31, 2005


1,000







340



1,120



(6
)


1,454Net income














184







184Other comprehensive income


















1



1Adoption of SFAS No. 158, net of income taxes of $2


















5



5December 31, 2006


1,000


$



$
340


$
1,304


$



$
1,644    F-22




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Basis of
    Presentation and Summary of Significant Accounting
    Policies  Basis of
    Presentation and Principles of Consolidation
    and/or and/or and/or
  Use of
    Estimates
    Regulated
    Operations
  Accounting for the Effects of
    Certain Types of Regulation.
  Cash and
    Cash Equivalents
     F-23




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Allowance
    for Doubtful Accounts
    Materials
    and Supplies
    Natural
    Gas Imbalances
  true-up
    Property,
    Plant and Equipment
       F-24




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Asset and
    Investment Impairments
    Revenue
    Recognition
    Price
    Risk Management Activities
  Accounting for Derivative Instruments
    and Hedging Activities
 F-25




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Environmental
    Costs and Other Contingencies
  Environmental Costs. clean-up clean-up
    Other Contingencies.
  Income
    Taxes
      Accounting
    for Asset Retirement Obligations
  Accounting for Asset Retirement
    Obligations Accounting for Conditional
    Asset Retirement Obligations
 F-26




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Pension
    and Other Postretirement Benefits
  Employers Accounting for
    Defined Benefit Pension and Other Postretirement
    Plans  An Amendment of FASB Statements No. 87,
    88, 106, and 132(R).
  Evaluation
    of Prior Period Misstatements in Current Financial
    Statements
  Considering the Effects of Prior Year
    Misstatements When Quantifying Misstatements in Current Year
    Financial Statements.
  New
    Accounting Pronouncements Issued But Not Yet Adopted
    Accounting for Uncertainty in Income Taxes. Accounting
    for Uncertainty in Income Taxes. Accounting for Income
    Taxes,
 F-27




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair Value Measurements. Fair Value
    Measurements
  Measurement Date of Other Postretirement
    Benefits.
  2.
    Income
    Taxes  Components of Income Taxes.
  2006


2005


2004(In millions)CurrentFederal

$
39


$
48


$
42State


3



7



642



55



48DeferredFederal


32



18



22State


5



1



437



19



26Total income taxes

$
79


$
74


$
74   Effective Tax Rate Reconciliation.
  2006


2005


2004(In millions, exceptfor rates)Income taxes at the statutory federal rate of 35%

$
92


$
87


$
85Increase (decrease)State income taxes, net of federal income tax benefit


5



5



6Earnings from unconsolidated affiliates where we anticipate
    receiving dividends


(17
)


(18
)


(17
)Other


(1
)






Income taxes

$
79


$
74


$
74Effective tax rate


30
%


30
%


30
%  F-28




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Deferred Tax Assets and Liabilities.
  2006


2005(In millions)Deferred tax liabilitiesProperty, plant and equipment

$
330


$
294Investment in unconsolidated affiliates


25



25Other


36



35Total deferred tax liability


391



354Deferred tax assetsU.S. net operating loss and tax credit carryovers


2



2Other


39



42Valuation allowance


(1
)


(1
)Total deferred tax asset


40



43Net deferred tax liability

$
351


$
311   Tax Carryovers.
  ExpirationAmount


Year(In millions)General business credit

$
1



2016-2022Net operating loss


4



2018-2021     Valuation Allowances.
  3.
    Financial
    Instruments    2006

2005Carrying

Fair

Carrying

FairAmount

Value

Amount

Value(In millions)Balance sheet financial instruments:Long-term debt, including current
    maturities(1)

$
1,196


$
1,302


$
1,195


$
1,277     (1)
    
    We estimated the fair value of our
    debt with fixed interest rates based on quoted market prices for
    the same or similar issues. F-29




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     4.
    Regulatory
    Assets and Liabilities    Description

2006


2005(In millions)Non-current regulatory assetsDeferred taxes on capitalized funds used during construction

$
47


$
44Other


7



2Total non-current regulatory
    assets(1)

$
54


$
46Non-current regulatory liabilitiesCost of removal of offshore assets

$
12


$
15Excess deferred federal income taxes


2



2Other






3Total non-current regulatory
    liabilities(1)

$
14


$
20     (1)
    
    Amounts are included as other
    non-current assets and liabilities on our balance sheets.  5.
    Accounting
    for Hedging Activities    6.
    Debt and
    Credit Facilities  Debt
    2006


2005(In millions)6.70% Notes due October 2007

$
100


$
1006.125% Notes due September 2008


100



1008.875% Notes due March 2010


400



4007.35% Notes due February 2031


300



3008.0% Notes due March 2032


300



3001,200



1,200Less: Current maturities


100



Unamortized discount


4



5Total long-term debt, less current maturities

$
1,096


$
1,195  F-30




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year(In millions)2007

$
1002008


1002010


400Thereafter


600Total maturities of long-term debt

$
1,200         7.
    Commitments
    and Contingencies  Legal
    Proceedings
  Gas Measurement Cases. and/or re: Natural Gas Royalties Qui Tam Litigation,
  Royalty Claim.
 F-31




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Environmental
    Matters
      Other
    Matter
  Duke Litigation.
  Capital
    Commitments and Purchase Obligations
    Operating
    Leases
   F-32




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ending December 31,(In millions)2007

$
32008


32009


12010


12011


1Total

$
9     8.
    Retirement
    Benefits  Pension and Retirement Benefits.
  Postretirement Benefits.
   F-33




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Change in Accumulated Postretirement Benefit Obligation, Plan
    Assets and Funded Status.
  2006


2005(In millions)Change in accumulated postretirement benefit obligation:Accumulated postretirement benefit obligation at beginning of
    period

$
85


$
89Interest cost


4



5Participant contributions


1



1Actuarial gain


(11
)


(4
)Benefits paid


(6
)


(6
)Accumulated postretirement benefit obligation at end of period

$
73


$
85Change in plan assets:Fair value of plan assets at beginning of period

$
56


$
53Actual return on plan assets


4



4Employer contributions


4



4Participant contributions


1



1Benefits paid


(6
)


(6
)Fair value of plan assets at end of period

$
59


$
56Reconciliation of funded status:Fair value of plan assets at September 30

$
59


$
56Less: Accumulated postretirement benefit obligation at end of
    period


73



85Funded status at September 30


(14
)


(29
)Unrecognized net actuarial
    loss(1)






6Net liability at December
    31(2)

$
(14
)

$
(23
)     (1)
    
    Amounts were reclassified to
    accumulated other comprehensive income upon the adoption of
    SFAS No. 158 in 2006.(2)
    
    Amounts at December 31, 2006
    are included in other non-current liabilities on our balance
    sheet.  Expected Payment of Future Benefits.
  Year Ending December 31,2007

$
52008


62009


62010


62011


62012  2016


26Total

$
55  F-34




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Components of Net Benefit Cost.
  2006


2005


2004(In millions)Interest cost

$
4


$
5


$
6Expected return on plan assets


(3
)


(3
)


(3
)Amortization of actuarial loss










2Net postretirement benefit cost

$
1


$
2


$
5   Actuarial Assumptions and Sensitivity
    Analysis.
  2006


2005


2004(Percent)Assumptions related to benefit obligations at September 30:Discount rate


5.50



5.25Assumptions related to benefit costs at December 31:Discount rate


5.25



5.75



6.00Expected return on plan
    assets(1)


8.00



7.50



7.50     (1)
    
    The expected return on plan assets
    is a pre-tax rate (before a tax rate ranging from
    29 percent to 30 percent on postretirement benefits)
    that is primarily based on an expected risk-free investment
    return, adjusted for historical risk premiums and specific risk
    adjustments associated with our debt and equity securities.
    These expected returns were then weighted based on the target
    asset allocations of our investment portfolio.    2006


2005(In millions)One percentage point increase:Accumulated postretirement benefit obligation

$
6


$
8One percentage point decrease:Accumulated postretirement benefit obligation

$
(5
)

$
(6
)   Plan Assets.
  Actual


ActualAsset Category

2006


2005(Percent)Equity securities


64



60Debt securities


34



31Other


2



9Total


100



100  F-35




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       9.
    Transactions
    with Major Customers    2006


2005


2004(In millions)Scana
    Corporation(1)

$
71


$
62


$
64Southern Company
    Services(2)


53



55



48BG
    LNG(3)


66



46



47     (1)
    
    A significant portion of revenues
    received from a subsidiary of Scana Corporation resulted from
    firm capacity released by Atlanta Gas Light Company under terms
    allowed by our tariff.(2)
    
    In 2004, Southern Company Services
    did not represent more than 10 percent of our revenues.(3)
    
    In 2005 and 2004, BG LNG did not
    represent more than 10 percent of our revenues.  10.
    Supplemental
    Cash Flow Information    2006


2005


2004(In millions)Interest paid, net of capitalized interest

$
94


$
93


$
94Income tax payments


58



49



48   11.
    Investments
    in Unconsolidated Affiliates and Transactions with
    Affiliates  Investments
    in Unconsolidated Affiliates
  Citrus.
    Bear Creek Storage Company (Bear Creek).
 F-36




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006


2005


2004(In millions)Operating results data:Operating revenues

$
262


$
256


$
249Operating expenses


113



109



100Income from continuing operations and net
    income(1)


78



76



74   2006


2005(In millions)Financial position data:Current assets

$
71


$
74Non-current assets


1,589



1,573Short-term debt


42



7Other current liabilities


54



32Long-term debt


418



461Other non-current liabilities


400



402Equity in net
    assets(1)


746



745     (1)
    
    The differences between our
    proportionate share of our equity investments net income
    and our earnings from unconsolidated affiliates and our share of
    their equity in net assets and our overall investment are due
    primarily to the excess purchase price amortization related to
    Citrus and differences between the estimated and actual equity
    earnings on our investments.  Transactions
    with Affiliates
  Cash Management Program.
  Note Receivables.
  Accounts Receivable Sales Program. Accounting for
    Transfers and Servicing of Financial Assets and Extinguishments
    of Liabilities
 F-37




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Taxes.
  Other Affiliate Balances.
  December 31,

December 31,2006

2005(In millions)Accounts receivable-other

$



$
4Other current liabilities


1



1   Affiliate Revenues and Expenses.
      2006

2005

2004(In millions)Revenues from affiliates

$
9


$
7


$
10Operation and maintenance expenses from affiliates


65



74



66   12.
    Supplemental
    Selected Quarterly Financial Information (Unaudited)    Quarters EndedMarch 31


June 30


September 30


December 31


Total(In millions)2006Operating revenues

$
135


$
127


$
130


$
136


$
528Operating income


67



60



60



65



252Net income


44



44



45



51



1842005Operating revenues

$
125


$
112


$
116


$
124


$
477Operating income


72



58



49



49



228Net income


52



43



39



40



174  F-38




---



##### Table of Contents



SCHEDULE II
  SOUTHERN
    NATURAL GAS COMPANY
    VALUATION AND QUALIFYING ACCOUNTS
    Years Ended December 31, 2006, 2005 and 2004
  Balance at


Charged to





Charged to


BalanceBeginning


Costs and





Other


at EndDescription

of Period


Expenses


Deductions


Accounts


of Period(In millions)2006Allowance for doubtful accounts

$
1


$



$



$
(1
)

$
Valuation allowance on deferred tax assets


1















1Legal reserves


2















2Environmental reserves






1











12005Allowance for doubtful accounts

$
3


$



$



$
(2
)

$
1Valuation allowance on deferred tax assets


1















1Legal reserves


2















22004Allowance for doubtful accounts

$
3


$



$



$



$
3Valuation allowance on deferred tax assets


1















1Legal reserves


1











1



2Environmental reserves


3



1



(4
)(1)






     (1)
    
    Primarily payments made for
    environmental remediation activities. F-39




---



##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
        
    F-40




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  December 31,


December 31,2006


2005(In thousands)ASSETSCurrent AssetsCash and cash equivalents

$
15,267


$
21,406Accounts receivable  net of allowance for doubtful
    accounts of $282 and $23


45,049



41,072Income tax receivable






872Materials and supplies


2,954



3,077Exchange gas receivable






508Other


1,025



1,184Total Current Assets


64,295



68,119Property, Plant and Equipment, at CostPlant in service


4,163,082



4,118,518Construction work in progress


85,746



9,693Less  accumulated depreciation and amortization


(1,304,133
)


(1,211,663
)Property, Plant and Equipment, Net


2,944,695



2,916,548Other AssetsUnamortized debt expense


4,687



5,735Regulatory assets


19,260



24,092Other


88,176



74,893Total Other Assets


112,123



104,720Total Assets

$
3,121,113


$
3,089,387LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesLong-term debt due within one year

$
84,000


$
14,000Accounts payable  trade and other


37,741



21,325Accounts payable  affiliated companies


2,823



5,501Accrued interest


14,805



15,091Accrued income taxes


2,375



Accrued taxes, other than income


9,332



9,090Exchange gas payable


24,225



5,182Other


16,040



6,161Total Current Liabilities


191,341



76,350Deferred CreditsDeferred income taxes


777,404



758,775Regulatory liabilities


14,256



9,049Other


8,129



33,070Total Deferred Credits


799,789



800,894Long-Term Debt


836,882



922,355Stockholders EquityCommon stock, $1 par value; 1,000 shares authorized,
    issued and outstanding


1



1Additional paid-in capital


634,271



634,271Accumulated other comprehensive loss


(10,524
)


(13,162
)Retained earnings


669,353



668,678Total Stockholders Equity


1,293,101



1,289,788Total Liabilities and Stockholders Equity

$
3,121,113


$
3,089,387    F-41




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004(In thousands)RevenuesTransportation of natural gas

$
485,189


$
476,049


$
467,422Gas Sales










44,996Total Revenues


485,189



476,049



512,418Costs and ExpensesNatural gas purchased










48,921Operations and maintenance


77,941



78,829



81,306Depreciation and amortization


98,653



91,125



68,053Taxes, other than income taxes


34,765



34,306



29,565Total Costs and Expenses


211,359



204,260



227,845Operating Income


273,830



271,789



284,573Other Income (Expense)Interest expense and related charges, net


(76,428
)


(79,290
)


(93,771
)Other, net


4,633



6,531



15,262Total Other Income (Expense)


(71,795
)


(72,759
)


(78,509
)Income Before Income Taxes


202,035



199,030



206,064Income Tax Expense


75,960



75,086



79,220Net Income

$
126,075


$
123,944


$
126,844    F-42




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004(In thousands)Common StockBalance, beginning and end of period

$
1


$
1


$
1Additional Paid-in CapitalBalance, beginning and end of period


634,271



634,271



634,271Accumulated Other Comprehensive IncomeBalance, beginning of period


(13,162
)


(15,800
)


(17,247
)Recognition in earnings of previously deferred net losses
    related to derivative instruments used as cash flow hedges


2,638



2,638



1,447Balance, end of period


(10,524
)


(13,162
)


(15,800
)Retained EarningsBalance, beginning of period


668,678



665,934



679,090Net income


126,075



123,944



126,844Dividends


(125,400
)


(121,200
)


(140,000
)Balance, end of period


669,353



668,678



665,934Total Stockholders Equity

$
1,293,101


$
1,289,788


$
1,284,406  F-43




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME
  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004(In thousands)Net income

$
126,075


$
123,944


$
126,844Recognition in earnings of previously deferred net losses
    related to derivative instruments used as cash flow hedges


2,638



2,638



1,447Total Comprehensive Income

$
128,713


$
126,582


$
128,291    F-44




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004(In thousands)Cash flows provided by operating activitiesNet income

$
126,075


$
123,944


$
126,844Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


98,653



91,125



68,053Amortization of hedge loss in other comprehensive income


2,638



2,638



1,447Amortization of discount and swap hedge loss in long term debt


527



530



535Amortization of regulatory assets and other deferred charges


3,274



3,380



5,205Amortization of debt costs


1,048



1,053



922Deferred income taxes


18,629



12,740



69,694Price risk management fair market valuation revaluation










10,980Price risk gain on buy out of gas contracts










(19,884
)Allowance for funds used during construction


(1,630
)


(1,441
)


(1,136
)Gain on sale of assets






(1,236
)


Changes in operating assets and liabilities:Accounts receivable


(3,327
)


403



(1,762
)Accounts payable


(3,316
)


(10,567
)


(17,258
)Accrued interest


(286
)


(324
)


(3,639
)Accrued income tax


3,247



(7,204
)


5,183Other current assets and liabilities


18,749



3,234



(9,680
)Price risk management assets and liabilities










(23,162
)Other assets and liabilities


(24,627
)


36,140



2,169Net cash provided by operating activities


239,654



254,415



214,511Cash flows used in investing activitiesCapital expenditures


(106,023
)


(37,610
)


(48,982
)Allowance for funds used during construction


1,630



1,441



1,136Proceeds from sale of assets






1,715



Net cash used in investing activities


(104,393
)


(34,454
)


(47,846
)Cash flows used in financing activitiesDividends


(125,400
)


(121,200
)


(140,000
)Net (payments) borrowings on the revolving credit facility


(2,000
)


(75,000
)


117,000Long-term debt finance costs










(746
)Payments on long-term debt


(14,000
)


(14,000
)


(256,500
)Net cash used in financing activities


(141,400
)


(210,200
)


(280,246
)Net increase (decrease) in cash and cash equivalents


(6,139
)


9,761



(113,581
)Cash and cash equivalents, beginning of period


21,406



11,645



125,226Cash and cash equivalents, end of period

$
15,267


$
21,406


$
11,645Supplemental disclosure of cash flow informationInterest paid (net of amounts capitalized)

$
72,067


$
74,714


$
95,770Income tax paid

$
56,814


$
66,954


$
4,432    F-45




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  (1)
    Corporate
    Structure  Citrus Corp.
        (2)
    Significant
    Accounting Policies  Basis of Presentation
  Regulatory Accounting Accounting for the Effects of
    Certain Types of Regulation
  Revenue Recognition
   F-46




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Derivative Instruments Accounting for
    Derivative Instruments and Hedging Activities
  Property, Plant and Equipment
      work-in-progress.
  SFAS No. 143,
    Accounting for Asset Retirement Obligations
 F-47




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##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FASB Interpretation No. 47, Accounting for Conditional
    Asset Retirement Obligations
    (FIN No. 47) Accounting for Asset Retirement Obligations and/or
    Year Ended


Year EndedDecember 31,


December 31,2006


2005(In thousands)Beginning balance

$
493


$
Incurred






493Settled


(36
)


Accretion Expense


24



Ending balance

$
481


$
493   SFAS No. 144,
    Accounting for the Impairment or Disposal of Long-Lived Assets
  Gas Imbalances
  Environmental Expenditures and/or
  Cash and Cash Equivalents
  Materials and Supplies
 F-48




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##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fuel Tracker
  Income Taxes SFAS No. 109, Accounting for Income Taxes
  Accounts Receivable
  Use of Estimates
  New
    Accounting Principles
  Accounting
    Principles Recently Adopted
  FASB Statement No. 158, Employers Accounting
    for Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB Statements No. 87,
    88, 106, and 132(R):
  SEC Staff Accounting Bulletin No. 108,
    Considering the Effects of Prior Year Misstatements when
    Quantifying Misstatements in Current Year Financial
    Statements (SAB No. 108).
  Accounting
    Principles Not Yet Adopted
  FIN 48, Accounting for Uncertainty in Income
    Taxes  an Interpretation of FASB Statement 109
    (FIN 48 or the Interpretation):
 F-49




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Income Taxes
  FASB Statement No. 157, Fair Value
    Measurements (FASB Statement No. 157 or the
    Statement) :
  (3)
    Long Term
    Debt    Years

December 31, 2006


December 31, 2005Due

Book Value


Fair Value


Book Value


Fair Value(In thousands)Citrus8.490% Senior Notes

2007-2009

$
90,000


$
95,011


$
90,000


$
95,624FGT9.750% Senior B Notes

1999-2008


13,000



13,663



19,500



20,13910.110% Senior C Notes

2009-2013


70,000



82,773



70,000



85,5139.190% Senior Notes

2005-2024


135,000



167,004



142,500



182,0127.625% Senior Notes

2010


325,000



348,137



325,000



353,9407.000% Senior Notes

2012


250,000



271,893



250,000



275,737Revolving Credit Agreement

2007


40,000



40,000



42,000



42,000Total debt outstanding




923,000


$
1,018,481



939,000


$
1,054,965Unamortized Debt Discount and Swap Loss




(2,118
)






(2,645
)Total debt




920,882







936,355Current portion of long-term debt




(84,000
)






(14,000
)Total long-term debt



$
836,882






$
922,355  F-50




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,Year

2006(In thousands)2007

$
84,0002008


44,0002009


51,5002010


346,5002011


21,500Thereafter


375,500$
923,000              F-51




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##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (4)
    Derivative
    Instruments      (5)
    Income
    Taxes    December 31,


December 31,2006


2005(In thousands)Deferred income tax assetRegulatory and other reserves

$
8,595


$
8,841Other






1768,595



9,017Deferred income tax liabilitiesDepreciation and amortization


742,566



728,444Deferred charges and other assets


27,981



27,972Regulatory costs


9,298



4,901Other


6,154



6,475785,999



767,792Net deferred income tax liabilities

$
777,404


$
758,775  F-52




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##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004(In thousands)Current Tax ProvisionFederal

$
52,135


$
53,526


$
7,561State


5,196



8,820



1,96557,331



62,346



9,526Deferred Tax ProvisionFederal


15,863



11,079



60,808State


2,766



1,661



8,88618,629



12,740



69,694Total income tax expense

$
75,960


$
75,086


$
79,220     Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004(In thousands)Statutory federal income tax provision

$
70,712


$
69,661


$
72,122State income taxes, net of federal benefit


5,176



6,813



7,053Other


72



(1,388
)


45Income tax expense

$
75,960


$
75,086


$
79,220Effective Tax Rate


37.6
%


37.7
%


38.4
%       (6)
    Employee
    Benefit Plans     F-53




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          catch-up
  Other
    Post  Employment Benefits
   F-54




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Lou Geiler et al v. Robert W. Jones et al.,
             F-55




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accumulated other
    comprehensive income
      SFAS 158Pre-SFAS


Adoption


Post-SFAS158


Adjustment


158(In thousands)Prepaid postretirement benefit cost (non-current) (Note 11)

$
(721
)

$
3,423


$
2,702Regulatory asset


1,951



(1,951
)


Regulatory liability






(1,472
)


(1,472
)    F-56




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended


Year EndedDecember 31,


December 31,2006


2005(In thousands)Change in Benefit ObligationBenefit obligation at the beginning of
    period(1)

$
6,665


$
9,872Service cost


46



71Interest cost


312



490Actuarial gain


(691
)


(3,522
)Retiree premiums


427



757Benefits paid


(964
)


(1,003
)Benefit obligation at end of year


5,795



6,665Change in Plan AssetsFair value of plan assets at the beginning of
    period(1)(2)


7,840



6,240Return on plan assets


(37
)


352Employer contributions


1,231



1,494Retiree premiums


427



757Benefits paid


(964
)


(1,003
)Fair value of plan assets at end of year


8,497



7,840Funded StatusFunded status at the end of the year

$
2,702


$
1,175Unrecognized net actuarial gain






(3,348
)Net liability recognized





$
(2,173
)Amount recognized in the Consolidated Balance SheetRegulatory assets (Note 11)

$



$
2,173Other assets  other (Note 11)


2,702



Regulatory liability (Note 12)


(1,472
)Deferred credits  other (Note 12)






(2,173
)Net asset (liability) recognized

$
1,230


$
     (1)
    
    For the purpose of this
    reconciliation, the plan adoption date is considered to be the
    same as the beginning period, January 1, 2005.(2)
    
    Plan assets at December 31,
    2006 and 2005 include the amount of assets expected to be
    received from the Enron Trust of $6.3 million. F-57




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended


Year EndedDecember 31,


December 31,2006


2005Discount rate


5.68
%


5.50
%Health care cost trend rates


11.00
%


12.00
%graded to 4.85
%


graded to 4.65
%by 2013



by 2012     Year Ended


Year EndedDecember 31,


December 31,2006


2005(In thousands)Service cost

$
46


$
71Interest cost


312



490Expected return on plan assets


(402
)


(352
)Recognized actuarial gain


(223
)


(174
)Net periodic (benefit) cost

$
(267
)

$
35     Year Ended


Year EndedDecember 31,


December 31,2006


2005Discount rate


5.50
%


5.75
%Rate of compensation increase


N/A



N/AExpected long-term return on plan assets


5.00
%


5.00
%Health care cost trend rates


12.00
%


12.00
%graded to 4.65
%


graded to 4.75
%by 2012



by 2012       One

OnePercentage

PercentagePoint

PointIncrease

Decrease(In thousands)Effect on total service and interest cost components

$
14


$
(13
)Effect on postretirement benefit obligation

$
274


$
(245
)  F-58




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Discount Rate Selection
    Plan Asset Information
      December 31,


December 31,2006


2005Equity securities


0
%


0
%Debt securities


0
%


0
%Cash and cash equivalents


100
%


100
%Total


100
%


100
%      F-59




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Expected Benefits


PaymentsBefore Effect of


MedicareYears

Medicare Part D


Part D


Net(In thousands)2007

$
539


$
89


$
4502008


583



93



4902009


615



95



5202010


622



96



5262011


621



95



5262012  2016


2,961



426



2,535   (7)
    Major
    Customers and Concentration of Credit Risk    Year Ended

Year Ended

Year EndedDecember 31,

December 31,

December 31,2006

2005

2004(In thousands)Florida Power & Light Company

$
200,592


$
181,486


$
189,500Teco Energy, Inc.

$
80,192


$
76,059


$
68,971     December 31,

December 31,2006

2005(In thousands)Florida Power & Light Company

$
15,065


$
15,153Teco Energy, Inc.

$
6,161


$
5,365     (8)
    Related
    Party Transactions   F-60




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          20-year
   F-61




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ASA
        (9)
    Regulatory
    Matters  No. RP04-12, Schedule FTS-2
   F-62




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. AI05-1-000 No. AI05-1-000
  36-inch
  18-inch 24-inch 36-inch
 F-63




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (10)
    Property,
    Plant and Equipment    December 31,


December 31,2006


2005(In thousands)Transmission plant

$
2,859,920


$
2,812,586General plant


24,970



26,383Intangible plant


25,726



27,083Construction
    work-in-progress


85,746



9,693Acquisition adjustment


1,252,466



1,252,4664,248,828



4,128,211less: Accumulated depreciation and amortization


(1,304,133
)


(1,211,663
)Property, Plant and Equipment, net

$
2,944,695


$
2,916,548   (11)
    Other
    Assets    December 31,


December 31,2006


2005(In thousands)Ramp-up
    assets,
    net(1)

$
11,928


$
12,240Cash balance plan settlement (Note 6)


4,185



6,047Other post employment benefits (Note 6)






2,173Environmental non-PCB
    clean-up
    cost (Note 13)


1,000



1,000Other miscellaneous


2,147



2,632Total Regulatory Assets

$
19,260


$
24,092     (1)
    
    Ramp-up
    assets are regulatory assets which FGT was specifically allowed
    to establish in the FERC certificates authorizing the
    Phase IV and V Expansion projects.    December 31,


December 31,2006


2005(In thousands)Long-term receivables

$
71,648


$
72,570Fuel tracker


11,747



Other post employment benefits (Note 6)


2,702



Other miscellaneous


2,079



2,323Total Other Assets  other

$
88,176


$
74,893  F-64




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (12)
    Deferred
    Credits    December 31,


December 31,2006


2005(In thousands)Balancing
    tools(1)

$
12,154


$
9,049Other post employment benefits (Note 6)


1,472



Other miscellaneous


630



Total Regulatory liabilities

$
14,256


$
9,049     (1)
    
    Balancing tools are a regulatory
    method by which FGT recovers the costs of operational balancing
    of the pipelines system. The balance can be a deferred
    charge or credit, depending on timing, rate changes and
    operational activities.    December 31,


December 31,2006


2005(In thousands)Post construction mitigation costs

$
2,073


$
2,600Construction prepayments






4,536Customer deposits (Note 7)






1,249Fuel tracker






14,477Deferred compensation (Note 6)


1,090



1,425Environmental non-PCB
    clean-up
    cost reserve (Note 13)


1,423



1,631Tax contingency


1,664



2,594Asset retirement obligation (Note 2)


481



493Other post employment benefits (Note 6)






2,173Other miscellaneous


1,398



1,892Total Deferred Credits  other

$
8,129


$
33,070   (13)
    Environmental
    Reserve     F-65




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (14)
    Accumulated
    Other Comprehensive Income    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004(In thousands)Interest rate lock on 7.625% $325 million note due 2010

$
1,872


$
1,872


$
1,872Interest rate swap loss on 7.0% $250 million note due 2012


1,228



1,228



1,229Interest rate swap gain on 9.19% $150 million note due
    2005-2024


(462
)


(462
)


(1,654
)$
2,638


$
2,638


$
1,447     Termination

Amortization

Original


December 31,


December 31,Date

Period

Gain/(Loss)


2006


2005(In thousands)Interest rate lock on 7.625% $325 million note due 2010

December 2000

10 years

$
(18,724
)

$
(7,334
)

$
(9,206
)Interest rate swap loss on 7.0% $250 million note due 2012

July 2002

10 years


(12,280
)


(6,807
)


(8,035
)Interest rate swap gain on 9.19% $150 million note due
    2005-2024

November 1994

20 years


9,236



3,617



4,079$
(10,524
)

$
(13,162
)   (15)
    Commitments
    and Contingencies  FASB Statement No. 5,
    Accounting for Contingencies,
  FDOT/FTE 24-inch
 F-66




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  24-inch and/or
       F-67




---



##### Table of Contents



CITRUS
    CORP. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     F-68




---



##### Table of Contents



SOUTHERN
    NATURAL GAS COMPANY
  $500,000,000
  OFFER TO EXCHANGE
 REGISTERED 5.90% Notes Due
    2017
 FOR
 ALL OUTSTANDING 5.90%
    Notes Due 2017
    PROSPECTUS
          The Bank
    of New York Trust Company, N.A.
 
   By Mail/
    Hand/ Overnight Delivery:
    The Bank of New York Trust Company, N.A.c/o The
    Bank of New York
    Corporate Trust Operations
    Reorganization Unit
    101 Barclay Street  7 East
    New York, NY 10286
    Attn: Corporate Reorganization Unit
 
  For
    Assistance Call:(212) 815-6331
    Fax Number:(212) 298-1915
   UNTIL          ,
    2007, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES,
    WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED
    TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE
    DEALERS OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS
    UNDERWRITERS AND WITH RESPECT TO THEIR UNUSED ALLOTMENTS OR
    SUBSCRIPTIONS.




---



##### Table of Contents



PART II
  INFORMATION
    NOT REQUIRED IN THE PROSPECTUS
  Item 20.
    Indemnification
    of Directors and Officers     
   
 
   
 
   
 
   
  and/or
 II-1




---



##### Table of Contents



and/or
  Item 21.
    Exhibit and
    Financial Statements Index    
 ExhibitNumber

Description3
.A

Restated Certificate of Incorporation dated as of March 7,
    2002 (Exhibit 3.A to our 2001
    Form 10-K
    filed with the SEC).3
.B

By-laws dated as of June 24, 2002. (Exhibit 3.B to our
    2002
    Form 10-K
    filed with the SEC).3
.C**

Certificate of Incorporation of Southern Natural Issuing
    Corporation.3
.D**

By-laws of Southern Natural Issuing Corporation.4
.A

Indenture dated June 1, 1987 between Southern Natural Gas
    Company and Wilmington Trust Company (as successor to
    JPMorgan Chase Bank, formerly known as The Chase Manhattan
    Bank), as trustee (Exhibit 4.A to our Form 2006
    10-K filed
    with the SEC).4
.A.1

First Supplemental Indenture dated as of September 30, 1997
    between Southern Natural Gas Company and Wilmington
    Trust Company (as successor to JPMorgan Chase Bank,
    formerly known as The Chase Manhattan Bank), as trustee
    (Exhibit 4.A.1 to our Form 2006
    10-K filed
    with the SEC).4
.A.2

Second Supplemental Indenture dated as of February 13, 2001
    between Southern Natural Gas Company and Wilmington
    Trust Company (as successor to JPMorgan Chase Bank,
    formerly known as The Chase Manhattan Bank), as trustee
    (Exhibit 4.A.2 to our Form 2006
    10-K filed
    with the SEC).4
.A.3

Third Supplemental Indenture dated as of March 26, 2007
    between Southern Natural Gas Company and The Bank of New York
    Trust Company, N.A., as trustee (Exhibit 4.A to our
    Current Report on
    Form 8-K
    filed with the SEC on March 28, 2007).4
.A.4

Fourth Supplemental Indenture dated as of May 4, 2007 among
    Southern Natural Gas Company, Wilmington Trust Company
    (solely with respect to certain portions thereof) and The Bank
    of New York Trust Company, N.A. (Exhibit 4.C to
    our
    Form 10-Q
    filed with the SEC on May 8, 2007).4
.A.5

Fifth Supplemental Indenture dated as of October 15, 2007
    among Southern Natural Gas, Wilmington Trust Company and The
    Bank of New York Trust Company, N.A. (included as Exhibit 4.A to
    our Current Report on Form 8-K filed with the SEC on
    October 16, 2007).4
.A.6

Form of 5.90% Note due 2017 (included as Exhibit A to
    Exhibit 4.A of our Current Report on
    Form 8-K
    filed with the SEC on March 28, 2007).4
.B

Indenture dated as of March 5, 2003 between Southern
    Natural Gas Company and The Bank of New York Trust Company,
    N.A., successor to The Bank of New York, as Trustee
    (Exhibit 4.1 to our Current Report on
    Form 8-K
    filed with the SEC on March 5, 2003).5
*

Opinion of Bracewell & Giuliani LLP regarding the
    validity of the securities registered hereby. 
 II-2




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##### Table of Contents



ExhibitNumber

Description8
*

Opinion of Bracewell & Giuliani LLP regarding tax
    matters.10
.A

First Tier Receivables Sale Agreement dated October 6,
    2006, between Southern Natural Gas Company and SNG Finance
    Company, L.L.C. (Exhibit 10.A to our
    Form 8-K
    filed with the SEC October 13, 2006).10
.B

Second Tier Receivables Sale Agreement dated
    October 6, 2006, between SNG Finance Company, L.L.C. and
    SNG Funding Company, L.L.C. (Exhibit 10.B to
    Form 8-K
    filed with the SEC October 13, 2006).10
.C

Receivables Purchase Agreement dated October 6, 2006, among
    SNG Funding Company, L.L.C., as Seller, Southern Natural Gas
    Company, as Servicer, Starbird Funding Corporation, as the
    initial Conduit Investor and Committed Investor, the other
    investors from time to time parties thereto, BNP Paribas, New
    York Branch, as the initial Managing Agent, the other Managing
    Agents from time to time parties thereto, and BNP Paribas, New
    York Branch, as Program Agent (Exhibit 10.C to our
    Form 8-K
    filed with the SEC October 13, 2006).10
.C.1

Amendment No. 1, dated as of December 1, 2006, to the
    Receivables Purchase Agreement dated as of October 6, 2006,
    among SNG Funding Company, Southern Natural Gas Company, as
    initial Servicer, Starbird Funding Corporation and the other
    funding entities from time to time party hereto as Investors,
    BNP Paribas, New York Branch, and the other financial
    institutions from time to time party hereto as Managing Agents,
    and BNP Paribas, New York Branch, as Program Agent
    (Exhibit 10.C.1 to our Form 2006
    10-K filed
    with the SEC).10
.D+

El Paso Corporation 2005 Omnibus Incentive Compensation
    Plan (incorporated by reference to Exhibit 10.B to
    El Paso Corporations Current Report on
    Form 8-K,
    File
    No. 1-14365,
    filed May 31, 2005); Amendment No. 1 effective as of
    December 2, 2005 (incorporated by reference to
    Exhibit 10.HH.1 to El Paso Corporations 2005
    Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.E+

2005 Supplemental Benefits Plan effective as of January 1,
    2005 (incorporated by reference to Exhibit 10.KK to
    El Paso Corporations 2005 Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.F+

2004 Key Executive Severance Protection Plan effective as of
    March 9, 2004 (incorporated by reference to
    Exhibit 10.P to El Paso Corporations 2003
    Form 10-K,
    File
    No. 1-14365).10
.G+

Severance Pay Plan Amended and Restated effective as of
    October 1, 2002; Supplement No. 1 effective as of
    January 1, 2003; and Amendment No. 1 to Supplement
    No. 1 effective as of March 21, 2003 (incorporated by
    reference to Exhibit 10.Z to El Paso
    Corporations 2003 First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 to Supplement No. 1 effective as of
    June 1, 2003; (incorporated by reference to
    Exhibit 10.Z.1 to El Paso Corporations 2003
    Second Quarter
    Form 10-Q);
    Amendment No. 3 to Supplement No. 1 effective as of
    September 2, 2003 (incorporated by reference to
    Exhibit 10.Z.1 to El Paso Corporations 2003
    Third Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 4 to Supplement No. 1 effective as of
    October 1, 2003 (incorporated by reference to
    Exhibit 10.W.1 to El Paso Corporations 2003
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 5 to Supplement No. 1 effective as of
    February 2, 2004 (incorporated by reference to
    Exhibit 10.W.2 to El Paso Corporations 2003
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Supplement No. 2 dated April 1, 2005 effective as of
    October 1, 2002 (incorporated by reference to
    Exhibit 10.S.1 to El Paso Corporations 2005
    Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.H+

2001 Omnibus Incentive Compensation Plan effective as of
    January 29, 2001 (incorporated by reference to
    Exhibit 10.1 to El Paso Corporations
    Form S-8,
    File
    No. 1-14365,
    filed June 29, 2001); Amendment No. 1 effective as of
    February 7, 2001 (incorporated by reference to
    Exhibit 10.J.1 to El Paso Corporations 2001
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 2 effective as of April 1, 2001
    (incorporated by reference to Exhibit 10.J.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 3 effective as of July 17, 2002
    (incorporated by reference to Exhibit 10.J.1 to
    El Paso Corporations 2002 Second Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 4 effective as of May 1, 2003
    (incorporated by reference to Exhibit 10.J.1 to
    El Paso Corporations 2003 Second Quarter
    Form 10-Q,
    File
    No. 1-
    14365); Amendment No. 5 effective as of March 8, 2004
    (incorporated by reference to Exhibit 10.K.1 to
    El Paso Corporations 2003 Annual Report on
    Form 10-K,
    File
    No. 1-14365). II-3




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##### Table of Contents



ExhibitNumber

Description10
.I+

Supplemental Benefits Plan Amended and Restated effective
    December 7, 2001 (incorporated by reference to
    Exhibit 10.K to El Paso Corporations 2001 Annual
    Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 1 effective as of November 7, 2002
    (incorporated by reference to Exhibit 10.K.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 2 effective as of June 1, 2004
    (incorporated by reference to Exhibit 10.L.1 to
    El Paso Corporations 2004 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 3 effective December 17, 2004
    (incorporated by reference to Exhibit 10.UU to El Paso
    Corporations 2004 Third Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 4 effective as of December 31, 2004
    (incorporated by reference to Exhibit 10.I.1 to
    El Paso Corporations 2005 Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.J+

1999 Omnibus Incentive Compensation Plan dated January 20,
    1999 (incorporated by reference to Exhibit 10.1 to
    El Paso Corporations
    Form S-8,
    File
    No. 1-14365,
    filed May 20, 1999); Amendment No. 1 effective as of
    February 7, 2001 (incorporated by reference to
    Exhibit 10.V.1 to El Paso Corporations 2001
    First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 effective as of May 1, 2003
    (incorporated by reference to Exhibit 10.I.1 to
    El Paso Corporations 2003 Second Quarter
    Form 10-Q,
    File
    No. 1-14365).10
.K+

Strategic Stock Plan Amended and Restated effective as of
    December 3, 1999 (incorporated by reference to
    Exhibit 10.1 to El Paso Corporations
    Form S-8,
    File
    No. 1-14365,
    filed January 14, 2000); Amendment No. 1 effective as
    of February 7, 2001 (incorporated by reference to
    Exhibit 10.M.1 to El Paso Corporations 2001
    First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 effective as of November 7, 2002;
    Amendment No. 3 effective as of December 6, 2002 and
    Amendment No. 4 effective as of January 29, 2003
    (incorporated by reference to Exhibit 10.P.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.L+

Omnibus Plan for Management Employees Amended and Restated
    effective as of December 3, 1999; Amendment No. 1
    effective as of December 1, 2000 (incorporated by reference
    to Exhibit 10.A to El Paso Corporations
    Form S-8,
    File
    No. 1-14365,
    filed December 18, 2000); Amendment No. 2 effective as
    of February 7, 2001 (incorporated by reference to
    Exhibit 10.U.1 to El Paso Corporations 2001
    First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 3 effective as of December 7, 2001
    (incorporated by reference to Exhibit 10.1 to El Paso
    Corporations
    Form S-8,
    File
    No. 1-14365,
    filed February 11, 2002); Amendment No. 4 effective as
    of December 6, 2002 to (incorporated by reference to
    Exhibit 10.T.1 to El Paso Corporations 2002
    Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.M+

Key Executive Severance Protection Plan Amended and Restated
    effective as of August 1, 1998 (incorporated by reference
    to Exhibit 10.N to El Paso Corporations 2004
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 1 effective as of February 7, 2001
    (incorporated by reference to Exhibit 10.K.1 to
    El Paso Corporations 2001 First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 effective as of November 7, 2002;
    Amendment No. 3 effective as of December 6, 2002
    (incorporated by reference to Exhibit 10.N.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 4 effective as of September 2, 2003
    (incorporated by reference to Exhibit 10.N.1 to
    El Paso Corporations 2003 Third Quarter
    Form 10-Q,
    File
    No. 1-14365).10
.N+

Executive Award Plan of Sonat Inc. Amended and Restated
    effective as of July 23, 1998, as amended May 27, 1999
    (incorporated by reference to Exhibit 10.S to El Paso
    Corporations 2004 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Termination of the Executive Award Plan of Sonat Inc.
    (incorporated by reference to Exhibit 10.K.1 to
    El Paso Corporations 2000 Second Quarter
    Form 10-Q,
    File
    No. 1-14365).10
.O+

Senior Executive Survivor Benefit Plan Amended and Restated
    effective as of August 1, 1998 (incorporated by reference
    to Exhibit 10.M to El Paso Corporations 2004
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 1 effective as of February 7, 2001
    (incorporated by reference to Exhibit 10.I.1 to
    El Paso Corporations 2001 First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 effective as of October 1, 2002
    (incorporated by reference to Exhibit 10.L.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365). II-4




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##### Table of Contents



ExhibitNumber

Description10
.P +

1995 Omnibus Compensation Plan Amended and Restated effective as
    of August 1, 1998 (incorporated by reference to
    Exhibit 10.I to El Paso Corporations 2004 Annual
    Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 1 effective as of December 3, 1998
    (incorporated by reference to Exhibit 10.I.1 to
    El Paso Corporations 2004 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 2 effective as of January 20, 1999
    (incorporated by reference to Exhibit 10.I.2 to
    El Paso Corporations 2004 Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.Q+

Agreement and General Release dated May 4, 2005, by and
    between El Paso Corporation and John W. Somerhalder II
    (incorporated by reference to Exhibit 10.A to El Paso
    Corporations
    Form 8-K,
    filed May 4, 2005).10
.R+

Form of Indemnification Agreement executed by El Paso
    Corporation for the benefit of each officer listed in
    Schedule A thereto, (incorporated by reference to
    Exhibit 10.X to El Paso Corporations 2005 Annual
    Report on
    Form 10-K,
    File
    No. 1-14365).10
.S

Registration Rights Agreement, dated as of March 26, 2007,
    among Southern Natural Gas Company and Banc of America
    Securities LLC, Citigroup Global Markets Inc., Credit Suisse
    Securities (USA) LLC, BNP Paribas Securities Corp., HVB Capital
    Markets, Inc., Greenwich Capital Markets, Inc., Scotia Capital
    (USA) Inc., and SG Americas Securities, LLC (Exhibit 10.A
    to our Current Report on
    Form 8-K
    filed with the SEC on March 28, 2007).12
*

Computation of Ratio of Earnings to Fixed Charges.21
*

Subsidiaries of Southern Natural Gas Company.23
.A**

Consent of Ernst & Young LLP.23
.B**

Consent of PricewaterhouseCoopers LLP.23
.C**

Consent of PricewaterhouseCoopers LLP.23
.D*

Consent of Bracewell & Giuliani LLP (included in
    Exhibits 5 and 8).25
*

Form T-1
    Statement of Eligibility and Qualification under the
    Trust Indenture Act of 1939 of The Bank of New York
    Trust Company, N.A. to act as trustee under the Indenture.99
.A**

Form of Letter of Transmittal.99
.B**

Form of Guidelines for Certification of Taxpayer Identification
    Number on Substitute
    Form W-9.99
.C**

Form of Notice of Guaranteed Delivery.99
.D**

Form of Letter to Brokers, Dealers, Commercial Banks,
    Trust Companies and Other Nominees.99
.E**

Form of Letter to Clients.99
.F**

Form of Exchange Agent Agreement.  
   
  *
    
    Indicates exhibits previously filed. 
 
  **
    
    Indicates exhibits filed herewith. 
  +
    
    Indicates a management plan or a compensatory plan or
    arrangement. II-5




---



##### Table of Contents



Item 22.
    Undertakings 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
  Provided, however,
 
 
   
 II-6




---



##### Table of Contents



Form S-4,
 
 
   
 II-7




---



##### Table of Contents



SIGNATURES
 
   
   
  
  By:
    /s/  John
    R. Sult   Title:
    Senior Vice President,
    Chief Financial Officer and Controller 
   
  Signature

Title/s/  James
    C. YardleyJames
    C. Yardley

Chairman of the Board and President
    (Principal Executive Officer)/s/  John
    R. SultJohn
    R. Sult

Senior Vice President, Chief Financial Officer and Controller
    (Principal Accounting and Financial Officer)/s/  Daniel
    B. MartinDaniel
    B. Martin

Senior Vice President and Director/s/  Norman
    G. HolmesNorman
    G. Holmes

Senior Vice President, Chief Commercial Officer and Director  II-8




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##### Table of Contents



EXHIBITS INDEX
  
 ExhibitNumber

Description3
.A

Restated Certificate of Incorporation dated as of March 7,
    2002 (Exhibit 3.A to our 2001
    Form 10-K
    filed with the SEC).3
.B

By-laws dated as of June 24, 2002. (Exhibit 3.B to our
    2002
    Form 10-K
    filed with the SEC).3
.C**

Certificate of Incorporation of Southern Natural Issuing
    Corporation.3
.D**

By-laws of Southern Natural Issuing Corporation.4
.A

Indenture dated June 1, 1987 between Southern Natural Gas
    Company and Wilmington Trust Company (as successor to
    JPMorgan Chase Bank, formerly known as The Chase Manhattan
    Bank), as trustee (Exhibit 4.A to our Form 2006
    10-K filed
    with the SEC).4
.A.1

First Supplemental Indenture dated as of September 30, 1997
    between Southern Natural Gas Company and Wilmington
    Trust Company (as successor to JPMorgan Chase Bank,
    formerly known as The Chase Manhattan Bank), as trustee
    (Exhibit 4.A.1 to our Form 2006
    10-K filed
    with the SEC).4
.A.2

Second Supplemental Indenture dated as of February 13, 2001
    between Southern Natural Gas Company and Wilmington
    Trust Company (as successor to JPMorgan Chase Bank,
    formerly known as The Chase Manhattan Bank), as trustee
    (Exhibit 4.A.2 to our Form 2006
    10-K filed
    with the SEC).4
.A.3

Third Supplemental Indenture dated as of March 26, 2007
    between Southern Natural Gas Company and The Bank of New York
    Trust Company, N.A., as trustee (Exhibit 4.A to our
    Current Report on
    Form 8-K
    filed with the SEC on March 28, 2007).4
.A.4

Fourth Supplemental Indenture dated as of May 4, 2007 among
    Southern Natural Gas Company, Wilmington Trust Company
    (solely with respect to certain portions thereof) and The Bank
    of New York Trust Company, N.A. (Exhibit 4.C to
    our
    Form 10-Q
    filed with the SEC on May 8, 2007).4
.A.5

Fifth Supplemental Indenture dated as of October 15, 2007
    among Southern Natural Gas, Wilmington Trust Company and The
    Bank of New York Trust Company, N.A. (included as Exhibit 4.A to
    our Current Report on Form 8-K filed with the SEC on
    October 16, 2007).4
.A.6

Form of 5.90% Note due 2017 (included as Exhibit A to
    Exhibit 4.A of our Current Report on
    Form 8-K
    filed with the SEC on March 28, 2007).4
.B

Indenture dated as of March 5, 2003 between Southern
    Natural Gas Company and The Bank of New York Trust Company,
    N.A., successor to The Bank of New York, as Trustee
    (Exhibit 4.1 to our Current Report on
    Form 8-K
    filed with the SEC on March 5, 2003).5
*

Opinion of Bracewell & Giuliani LLP regarding the
    validity of the securities registered hereby.8
*

Opinion of Bracewell & Giuliani LLP regarding tax
    matters.10
.A

First Tier Receivables Sale Agreement dated October 6,
    2006, between Southern Natural Gas Company and SNG Finance
    Company, L.L.C. (Exhibit 10.A to our
    Form 8-K
    filed with the SEC October 13, 2006).10
.B

Second Tier Receivables Sale Agreement dated
    October 6, 2006, between SNG Finance Company, L.L.C. and
    SNG Funding Company, L.L.C. (Exhibit 10.B to
    Form 8-K
    filed with the SEC October 13, 2006).10
.C

Receivables Purchase Agreement dated October 6, 2006, among
    SNG Funding Company, L.L.C., as Seller, Southern Natural Gas
    Company, as Servicer, Starbird Funding Corporation, as the
    initial Conduit Investor and Committed Investor, the other
    investors from time to time parties thereto, BNP Paribas, New
    York Branch, as the initial Managing Agent, the other Managing
    Agents from time to time parties thereto, and BNP Paribas, New
    York Branch, as Program Agent (Exhibit 10.C to our
    Form 8-K
    filed with the SEC October 13, 2006).10
.C.1

Amendment No. 1, dated as of December 1, 2006, to the
    Receivables Purchase Agreement dated as of October 6, 2006,
    among SNG Funding Company, Southern Natural Gas Company, as
    initial Servicer, Starbird Funding Corporation and the other
    funding entities from time to time party hereto as Investors,
    BNP Paribas, New York Branch, and the other financial
    institutions from time to time party hereto as Managing Agents,
    and BNP Paribas, New York Branch, as Program Agent
    (Exhibit 10.C.1 to our Form 2006
    10-K filed
    with the SEC).




---



##### Table of Contents



ExhibitNumber

Description10
.D+

El Paso Corporation 2005 Omnibus Incentive Compensation
    Plan (incorporated by reference to Exhibit 10.B to
    El Paso Corporations Current Report on
    Form 8-K,
    File
    No. 1-14365,
    filed May 31, 2005); Amendment No. 1 effective as of
    December 2, 2005 (incorporated by reference to
    Exhibit 10.HH.1 to El Paso Corporations 2005
    Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.E+

2005 Supplemental Benefits Plan effective as of January 1,
    2005 (incorporated by reference to Exhibit 10.KK to
    El Paso Corporations 2005 Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.F+

2004 Key Executive Severance Protection Plan effective as of
    March 9, 2004 (incorporated by reference to
    Exhibit 10.P to El Paso Corporations 2003
    Form 10-K,
    File
    No. 1-14365).10
.G+

Severance Pay Plan Amended and Restated effective as of
    October 1, 2002; Supplement No. 1 effective as of
    January 1, 2003; and Amendment No. 1 to Supplement
    No. 1 effective as of March 21, 2003 (incorporated by
    reference to Exhibit 10.Z to El Paso
    Corporations 2003 First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 to Supplement No. 1 effective as of
    June 1, 2003; (incorporated by reference to
    Exhibit 10.Z.1 to El Paso Corporations 2003
    Second Quarter
    Form 10-Q);
    Amendment No. 3 to Supplement No. 1 effective as of
    September 2, 2003 (incorporated by reference to
    Exhibit 10.Z.1 to El Paso Corporations 2003
    Third Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 4 to Supplement No. 1 effective as of
    October 1, 2003 (incorporated by reference to
    Exhibit 10.W.1 to El Paso Corporations 2003
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 5 to Supplement No. 1 effective as of
    February 2, 2004 (incorporated by reference to
    Exhibit 10.W.2 to El Paso Corporations 2003
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Supplement No. 2 dated April 1, 2005 effective as of
    October 1, 2002 (incorporated by reference to
    Exhibit 10.S.1 to El Paso Corporations 2005
    Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.H+

2001 Omnibus Incentive Compensation Plan effective as of
    January 29, 2001 (incorporated by reference to
    Exhibit 10.1 to El Paso Corporations
    Form S-8,
    File
    No. 1-14365,
    filed June 29, 2001); Amendment No. 1 effective as of
    February 7, 2001 (incorporated by reference to
    Exhibit 10.J.1 to El Paso Corporations 2001
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 2 effective as of April 1, 2001
    (incorporated by reference to Exhibit 10.J.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 3 effective as of July 17, 2002
    (incorporated by reference to Exhibit 10.J.1 to
    El Paso Corporations 2002 Second Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 4 effective as of May 1, 2003
    (incorporated by reference to Exhibit 10.J.1 to
    El Paso Corporations 2003 Second Quarter
    Form 10-Q,
    File
    No. 1-
    14365); Amendment No. 5 effective as of March 8, 2004
    (incorporated by reference to Exhibit 10.K.1 to
    El Paso Corporations 2003 Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.I+

Supplemental Benefits Plan Amended and Restated effective
    December 7, 2001 (incorporated by reference to
    Exhibit 10.K to El Paso Corporations 2001 Annual
    Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 1 effective as of November 7, 2002
    (incorporated by reference to Exhibit 10.K.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 2 effective as of June 1, 2004
    (incorporated by reference to Exhibit 10.L.1 to
    El Paso Corporations 2004 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 3 effective December 17, 2004
    (incorporated by reference to Exhibit 10.UU to El Paso
    Corporations 2004 Third Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 4 effective as of December 31, 2004
    (incorporated by reference to Exhibit 10.I.1 to
    El Paso Corporations 2005 Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.J+

1999 Omnibus Incentive Compensation Plan dated January 20,
    1999 (incorporated by reference to Exhibit 10.1 to
    El Paso Corporations
    Form S-8,
    File
    No. 1-14365,
    filed May 20, 1999); Amendment No. 1 effective as of
    February 7, 2001 (incorporated by reference to
    Exhibit 10.V.1 to El Paso Corporations 2001
    First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 effective as of May 1, 2003
    (incorporated by reference to Exhibit 10.I.1 to
    El Paso Corporations 2003 Second Quarter
    Form 10-Q,
    File
    No. 1-14365).10
.K+

Strategic Stock Plan Amended and Restated effective as of
    December 3, 1999 (incorporated by reference to
    Exhibit 10.1 to El Paso Corporations
    Form S-8,
    File
    No. 1-14365,
    filed January 14, 2000); Amendment No. 1 effective as
    of February 7, 2001 (incorporated by reference to
    Exhibit 10.M.1 to El Paso Corporations 2001
    First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 effective as of November 7, 2002;
    Amendment No. 3 effective as of December 6, 2002 and
    Amendment No. 4 effective as of January 29, 2003
    (incorporated by reference to Exhibit 10.P.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365).




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##### Table of Contents



ExhibitNumber

Description10
.L+

Omnibus Plan for Management Employees Amended and Restated
    effective as of December 3, 1999; Amendment No. 1
    effective as of December 1, 2000 (incorporated by reference
    to Exhibit 10.A to El Paso Corporations
    Form S-8,
    File
    No. 1-14365,
    filed December 18, 2000); Amendment No. 2 effective as
    of February 7, 2001 (incorporated by reference to
    Exhibit 10.U.1 to El Paso Corporations 2001
    First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 3 effective as of December 7, 2001
    (incorporated by reference to Exhibit 10.1 to El Paso
    Corporations
    Form S-8,
    File
    No. 1-14365,
    filed February 11, 2002); Amendment No. 4 effective as
    of December 6, 2002 to (incorporated by reference to
    Exhibit 10.T.1 to El Paso Corporations 2002
    Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.M+

Key Executive Severance Protection Plan Amended and Restated
    effective as of August 1, 1998 (incorporated by reference
    to Exhibit 10.N to El Paso Corporations 2004
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 1 effective as of February 7, 2001
    (incorporated by reference to Exhibit 10.K.1 to
    El Paso Corporations 2001 First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 effective as of November 7, 2002;
    Amendment No. 3 effective as of December 6, 2002
    (incorporated by reference to Exhibit 10.N.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 4 effective as of September 2, 2003
    (incorporated by reference to Exhibit 10.N.1 to
    El Paso Corporations 2003 Third Quarter
    Form 10-Q,
    File
    No. 1-14365).10
.N+

Executive Award Plan of Sonat Inc. Amended and Restated
    effective as of July 23, 1998, as amended May 27, 1999
    (incorporated by reference to Exhibit 10.S to El Paso
    Corporations 2004 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Termination of the Executive Award Plan of Sonat Inc.
    (incorporated by reference to Exhibit 10.K.1 to
    El Paso Corporations 2000 Second Quarter
    Form 10-Q,
    File
    No. 1-14365).10
.O+

Senior Executive Survivor Benefit Plan Amended and Restated
    effective as of August 1, 1998 (incorporated by reference
    to Exhibit 10.M to El Paso Corporations 2004
    Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 1 effective as of February 7, 2001
    (incorporated by reference to Exhibit 10.I.1 to
    El Paso Corporations 2001 First Quarter
    Form 10-Q,
    File
    No. 1-14365);
    Amendment No. 2 effective as of October 1, 2002
    (incorporated by reference to Exhibit 10.L.1 to
    El Paso Corporations 2002 Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.P+

1995 Omnibus Compensation Plan Amended and Restated effective as
    of August 1, 1998 (incorporated by reference to
    Exhibit 10.I to El Paso Corporations 2004 Annual
    Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 1 effective as of December 3, 1998
    (incorporated by reference to Exhibit 10.I.1 to
    El Paso Corporations 2004 Annual Report on
    Form 10-K,
    File
    No. 1-14365);
    Amendment No. 2 effective as of January 20, 1999
    (incorporated by reference to Exhibit 10.I.2 to
    El Paso Corporations 2004 Annual Report on
    Form 10-K,
    File
    No. 1-14365).10
.Q+

Agreement and General Release dated May 4, 2005, by and
    between El Paso Corporation and John W. Somerhalder II
    (incorporated by reference to Exhibit 10.A to El Paso
    Corporations
    Form 8-K,
    filed May 4, 2005).10
.R+

Form of Indemnification Agreement executed by El Paso
    Corporation for the benefit of each officer listed in
    Schedule A thereto, (incorporated by reference to
    Exhibit 10.X to El Paso Corporations 2005 Annual
    Report on
    Form 10-K,
    File
    No. 1-14365).10
.S

Registration Rights Agreement, dated as of March 26, 2007,
    among Southern Natural Gas Company and Banc of America
    Securities LLC, Citigroup Global Markets Inc., Credit Suisse
    Securities (USA) LLC, BNP Paribas Securities Corp., HVB Capital
    Markets, Inc., Greenwich Capital Markets, Inc., Scotia Capital
    (USA) Inc., and SG Americas Securities, LLC (Exhibit 10.A
    to our Current Report on
    Form 8-K
    filed with the SEC on March 28, 2007).12
*

Computation of Ratio of Earnings to Fixed Charges.21
*

Subsidiaries of Southern Natural Gas Company.23
.A**

Consent of Ernst & Young LLP.23
.B**

Consent of PricewaterhouseCoopers LLP.23
.C**

Consent of PricewaterhouseCoopers LLP.23
.D*

Consent of Bracewell & Giuliani LLP (included in
    Exhibits 5 and 8).25
*

Form T-1
    Statement of Eligibility and Qualification under the
    Trust Indenture Act of 1939 of The Bank of New York
    Trust Company, N.A. to act as trustee under the Indenture.




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##### Table of Contents



ExhibitNumber

Description99
.A**

Form of Letter of Transmittal.99
.B**

Form of Guidelines for Certification of Taxpayer Identification
    Number on Substitute
    Form W-9.99
.C**

Form of Notice of Guaranteed Delivery.99
.D**

Form of Letter to Brokers, Dealers, Commercial Banks,
    Trust Companies and Other Nominees.99
.E**

Form of Letter to Clients.99
.F**

Form of Exchange Agent Agreement.    
  *
    
    Indicates exhibits previously filed. 
 
  **
    
    Indicates exhibits filed herewith. 
  +
    
    Indicates a management plan or a compensatory plan or
    arrangement.