Registration No. 333-113757

     As filed with the Securities and Exchange Commission on June 25, 2004

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                            FORM S-3 AMENDMENT NO. 2
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

SOUTHERN UNION COMPANY               Delaware                75-0571592
SOUTHERN UNION FINANCING II          Delaware            Application Pending
SOUTHERN UNION FINANCING III         Delaware            Application Pending
(Exact name of Registrant     (State or other             (I.R.S. Employer
as specified in its            Jurisdiction of           Identification  Number)
Charter)                       Incorporation or
                               Organization)

                          One PEI Center, Second Floor
                        Wilkes-Barre, Pennsylvania 18711
                                 (570) 820-2400
               (Address, including zip code, and telephone number,
                    including area code, of each registrant's
                          principal executive offices)

         Dennis K. Morgan, Esq.                        With a copy to:

                                                   Sean P. McGuinness, Esq.
Executive Vice President-Administration              David J. Lavan, Esq.
     General Counsel and Secretary              Fleischman and Walsh, L.L.P.
         Southern Union Company                 1400 Sixteenth Street, N.W.,
      One PEI Center, Second Floor                        Suite 600
    Wilkes-Barre, Pennsylvania 18711               Washington, D.C. 20036
             (570) 820-2400                            (202) 939-7900

                (Name, address, including zip code, and telephone
                    number, including area code, of agent for
                          service for each registrant)

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          Approximate Date of Commencement of Proposed Sale to Public:
         From time to time after the effective date of the Registration
        Statement, as determined by market conditions and other factors.


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     If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
     ---
     If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. X
                                                   ---
     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement number of the earlier effective registration
statement for the same offering. ---

     If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
                      ---
     If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
                               ---

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                                              CALCULATION OF REGISTRATION FEE
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------------------------------------------------------------- --------------------- -------------------- --------------------
<S>                                                               <C>                  <C>                  <C>      <C>
     Title of each class of securities to be registered           Amount to be       Proposed maximum         Amount of
                                                               registered (1)(2)(3) aggregate offering     Registration Fee
                                                                                      price (3)(4)
------------------------------------------------------------- --------------------- -------------------- --------------------
------------------------------------------------------------- --------------------- -------------------- --------------------
  Debt securities, common stock, $1.00 par value, and
preferred stock, without par value, warrants to purchase
debt securities, common stock or preferred stock,
securities purchase contracts, securities purchase units
and depositary shares of Southern Union Company debt
securities and warrants to purchase debt securities of
Southern Union Company (5)

  Trust preferred securities of Southern Union Financing II
and Southern Union Financing III (6)

  Guarantees of trust preferred securities of the Trusts by
Southern Union Company (6)
------------------------------------------------------------- --------------------- -------------------- --------------------
------------------------------------------------------------- --------------------- -------------------- --------------------


                           TOTAL                                  $957,830,000         $957,830,000         $121,358 (7)
------------------------------------------------------------- --------------------- -------------------- --------------------
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(1)  An indeterminate principal amount or number of debt securities, common
     stock, preferred stock, guarantees, warrants to purchase common stock,
     preferred stock and debt securities, stock purchase contracts, stock
     purchase units and depositary shares as may be issued in the event Southern
     Union Company elects to offer fractional interests in preferred stock and
     such indeterminate principal amounts or number of debt securities, common
     stock or preferred stock as may be issued upon conversion of, or in
     exchange for, or upon exercise of, or pursuant to, warrants, or convertible
     or exchangeable debt securities, stock purchase contracts or stock purchase
     units or preferred stock that provides for exercise or conversion into or
     purchase of such securities of Southern Union Company and an indeterminate
     number of trust preferred securities of Southern Union Financing II and
     Southern Union Financing III (the "Trusts") as may from time to time be
     issued at indeterminate prices, with an aggregate offering price not to
     exceed $1,000,000,000. Debt securities may be issued and sold to the
     Trusts, in which event the debt securities may later be distributed to the
     holders of trust preferred securities.
(2)  In the United States dollars or the equivalent thereof in any other
     currency, composite currency or currency unit as shall result in an
     aggregate initial offering price for all securities of $1,000,000,000.
(3)  This amount represents the principal amount of any debt securities issued
     at their stated principal amount, the issue price of any debt securities
     issued at a discount from the stated principal amount, the issue price of
     any preferred stock, warrants to purchase common stock, preferred stock and
     debt securities, stock purchase contracts, stock purchase units, depositary
     shares and trust preferred securities and the amount computed pursuant to
     Rule 457(c) for any common stock.
(4)  Estimated solely for the purpose of calculating the registration fee, which
     is calculated in accordance with Rule 457(o) of the rules and regulations
     under the Securities Act of 1933. Rule 457(o) permits the registration fee
     to be calculated on the basis of the maximum offering price of all the
     securities listed and, therefore, the table does not specify by each class
     information as to the amount to be registered, the proposed maximum
     offering price per unit or the proposed maximum aggregate offering price.
(5)  Also includes an indeterminate number of securities that may be issued upon
     exercise, conversion or exchange of or purchase pursuant to any securities
     registered hereunder that provide for conversion or exchange. Exclusive of
     accrued interest and distributions, if any.
(6)  Includes the rights of holders of the trust preferred securities under the
     guarantees of trust preferred securities and back-up undertakings,
     consisting of obligations by Southern Union Company, as set forth in the
     declaration of trust, the applicable indenture and any supplemental
     indenture thereto, in each case, as further described in the registration
     statement. No separate consideration will be received for any guarantees or
     any back-up.
(7)  Pursuant to Rule 429 under the Securities Act of 1933, Southern Union is
     carrying forward $42,170,000 of securities previously registered on its
     Registration Statement on Form S-3, File No. 333-102338, none of which have
     been issued or sold and for which it has paid $3,879 of registration fees
     at the then-effective rate, which are being applied in lieu of $5,342 of
     registration fees due at the present rate for the securities registered by
     this Registration Statement pursuant to Rule 457(p). Therefore, the
     Registration Fee for the current Registration Statement as calculated
     pursuant to Rule 457(o) of the rules and regulations under the Securities
     Act of 1933 is $121,358.

--------------------------------------------------------------------------------

     Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
included in this Registration Statement is a combined prospectus relating also
to securities previously registered pursuant to the Registration Statement on
Form S-3 (File No. 333-102338) and not issued, which other Registration
Statement, as amended, previously filed by Southern Union Company has been
declared effective. This Registration Statement constitutes Post-Effective
Amendment No. 3 to Registration Statement No. 333-102338 and such Post-Effective
Amendment shall hereafter become effective concurrently with the effectiveness
of this Registration Statement and in accordance with Section 8(c) of the
Securities Act of 1933.

     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 this registration statement shall become
effective on such date as the Securities Exchange Commission, acting pursuant to
said Section 8(a), may determine.


<PAGE>




The information in this preliminary 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 preliminary
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.

                   SUBJECT TO COMPLETION, DATED  , 2004

PRELIMINARY PROSPECTUS
                                 $1,000,000,000

                             SOUTHERN UNION COMPANY

           Debt Securities, Common Stock, Preferred Stock, Guarantees,
     Warrants to Purchase Debt Securities, Common Stock and Preferred Stock,
 Securities Purchase Contracts, Securities Purchase Units and Depositary Shares

                           SOUTHERN UNION FINANCING II
                          SOUTHERN UNION FINANCING III
         Trust Preferred Securities Guaranteed by Southern Union Company

         We may offer and sell the securities from time to time in one or more
offerings. This prospectus provides you with a general description of the
securities we may offer.

         Each time we sell securities we will provide a supplement to this
prospectus that contains specific information about the offering and the terms
of the securities. The supplement may also add, update or change information
contained in this prospectus. You should carefully read this prospectus and the
accompanying prospectus supplement before you invest in any of our securities.

Southern Union Company

         Southern Union Company may offer and sell the following securities:

o        debt securities;
o        common stock;
o        preferred stock;
o        guarantees of trust preferred securities;
o        warrants to purchase debt securities, common stock and preferred stock;
o        securities purchase contracts and securities purchase units; and
o        depositary shares.

The Southern Union Company Trusts

         Southern Union Financing II and Southern Union Financing III may offer
and sell trust preferred securities guaranteed by Southern Union Company

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.


                 The date of this Prospectus is _________, 2004.


<PAGE>


                              ABOUT THIS PROSPECTUS

         This prospectus is part of a "shelf" registration statement that we
filed with the United States Securities and Exchange Commission or the "SEC." By
using a shelf registration statement, we may sell up to $1,000,000,000 offering
price of any combination of the securities described in this prospectus from
time to time and in one or more offerings. This prospectus only provides you
with a general description of the securities that we may offer. Each time we
sell securities, we will provide a supplement to this prospectus that contains
specific information about the terms of the securities. The supplement may also
add, update or change information contained in this prospectus. Before
purchasing any securities, you should carefully read both this prospectus and
the accompanying prospectus supplement, together with the additional information
described under the heading "Where You Can Find More Information."

         You should rely only on the information contained or incorporated by
reference in this prospectus and in any supplement. We have not authorized any
other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. You
should assume that the information appearing in this prospectus and the
accompanying prospectus supplement is accurate as of the date on their
respective covers. Our business, financial condition, results of operations and
prospects may have changed since that date.

                           FORWARD-LOOKING STATEMENTS

         We have made statements in this prospectus and the documents that we
incorporate by reference that constitute forward-looking statements that are
based on current expectations, estimates and projections about the industry in
which the Company operates, management's beliefs and assumptions made by
management. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions, which are difficult to predict and many of which
are outside the Company's control. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such forward-looking
statements. The Company undertakes no obligation to update publicly any forward-
looking statements, whether as a result of new information, future events or
otherwise. Readers are cautioned not to put undue reliance on such
forward-looking statements. Stockholders may review the Company's reports filed
in the future with the Securities and Exchange Commission for more current
descriptions of developments that could cause actual results to differ
materially from such forward-looking statements.

         Factors that could cause or contribute to actual results differing
materially from such forward-looking statements include the following: cost of
gas; gas sales volumes; weather conditions in the Company's service territories;
the achievement of operating efficiencies and the purchases and implementation
of new technologies for attaining such efficiencies; impact of relations with
labor unions of bargaining-unit employees; the receipt of timely and adequate
rate relief; the outcome of pending and future litigation; governmental
regulations and proceedings affecting or involving the Company; unanticipated
environmental liabilities; changes in business strategy; the risk that the
businesses acquired and any other businesses or investments that Southern Union
has acquired or may acquire may not be successfully integrated with the
businesses of Southern Union; the impairment or sale of investment securities;
and the nature and impact of any extraordinary transactions such as any
acquisition or divestiture of a business unit or any assets. These are
representative of the factors that could affect the outcome of the
forward-looking statements. In addition, such statements could be affected by
general industry and market conditions, and general economic conditions,
including interest rate fluctuations, federal, state and local laws and
regulations affecting the retail gas industry or the energy industry generally,
and other factors.

         Other factors that could cause actual results to differ materially from
estimates and projections contained in forward-looking statements are described
in the documents that we incorporate by reference. You should not place undue
reliance on forward-looking statements, which speak only as of the date of this
prospectus, or, in the case of documents incorporated by reference, the date of
those documents.

         We will not release publicly any revisions to these forward-looking
statements reflecting events or circumstances after the date of this prospectus
or reflecting the occurrence of unanticipated events, unless the securities laws
require us to do so.

                       WHERE YOU CAN FIND MORE INFORMATION

         We have filed a registration statement with the SEC under the
Securities Act of 1933 that registers the securities offered by this prospectus.
The registration statement, including the attached exhibits, contains additional
relevant information about us and the securities being offered. The rules and
regulations of the SEC allow us to omit certain information included in the
registration statement from this prospectus.

         In addition, Southern Union files annual, quarterly and special
reports, proxy statements and other information with the SEC under the
Securities Exchange Act of 1934. You may read and copy this information at, and
you may also obtain copies of this information by mail from, the SEC's Public
Reference Room, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. The SEC also maintains an Internet world wide web
site that contains reports, proxy statements and other information about
issuers, including Southern Union, who file electronically with the SEC. The
address of that site is http://www.sec.gov. You can also inspect reports, proxy
statements and other information about Southern Union at the offices of The New
York Stock Exchange, Inc., located at 20 Broad Street, New York, New York 10005.

                           INCORPORATION BY REFERENCE

         The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this document, except for
any information that is superseded by subsequently incorporated documents or by
information that is included directly in this prospectus or any prospectus
supplement.

         We incorporate by reference the documents listed below that Southern
Union has previously filed with the SEC. They contain important information
about Southern Union and its financial condition.

                                   SEC FILINGS
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Southern Union Company (File No.  1-6407)                                                         Date Filed
-----------------------------------------                                                      ------------------
<S>                   <C>                                 <C> <C>                                        <C> <C>
Annual Report on Form 10-K for the fiscal year ended June 30, 2003.........................    September 29, 2003
Current Report on Form 8-K.................................................................    September 29, 2003
Current Report on Form 8-K.................................................................    September 30, 2003
Current Report on Form 8-K.................................................................    October 8, 2003
Current Report on Form 8-K.................................................................    October 8, 2003
Proxy Statement Relating to the Annual Meeting of Shareholders to be held November 4, 2003.    October 8, 2003
Current Report on Form 8-K.................................................................    October 29, 2003
Quarterly Report on Form 10-Q for the period ended September 30, 2003......................    November 14, 2003
Current Report on Form 8-K.................................................................    February 4, 2004
Quarterly Report on Form 10-Q for the period ended December 31, 2003.......................    February 17, 2004
Amended Quarterly Report on Form 10-Q for the period ended September 30, 2003..............    May 7, 2004
Amended Quarterly Report on Form 10-Q for the period ended December 31, 2003...............    May 7, 2004
Quarterly Report on Form 10-Q for the period ended March 31, 2004..........................    May 14, 2004
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         We are also incorporating by reference additional documents that we may
file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 between the date of this prospectus until the
termination of the offering of the securities offered by this prospectus. These
documents include periodic reports, including Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy
statements.

         You can obtain any of the documents incorporated by reference in this
document through us or from the SEC through the SEC's web site at the address
provided above. Documents incorporated by reference are available from us
without charge, excluding any exhibits to those documents unless the exhibits
are specifically incorporated by reference in such document. You can obtain
documents incorporated by reference in this document by requesting them in
writing or by telephone from us at the following address:

                            Attention: John F. Walsh
                         Director of Investor Relations
                             Southern Union Company
                                 One PEI Center
                        Wilkes-Barre, Pennsylvania 18711
                          Telephone No.: (570) 829-8600

         Separate financial statements of the trusts have not been included in
this prospectus.  Southern Union and the trusts do not consider such financial
statements to be helpful because:

     o    Southern Union beneficially owns directly or indirectly all of the
          undivided beneficial interests in the assets of the trusts (other than
          the beneficial interests represented by any trust preferred securities
          issued and sold). See "The Trusts," "Description of Securities--Trust
          Preferred Securities" and "Trust Guarantees."

     o    Southern Union will guarantee the trust preferred securities such that
          the holders of the trust preferred securities, with respect to the
          payment of distributions and amounts upon liquidation, dissolution and
          winding-up, are in the same position with regard to assets of Southern
          Union as a holder of the subordinated debt securities to be issued by
          Southern Union.

     o    In future filings under the Securities Exchange Act of 1934, an
          audited footnote to Southern Union's annual financial statements will
          state that all common securities issued by the trusts are owned by
          Southern Union, that the sole assets of the trusts are the
          subordinated debt securities of Southern Union having a specified
          total principal amount and that, considered together, Southern Union's
          obligations under the subordinated debt securities and the related
          agreements, including the guarantees, constitute a full and
          unconditional guarantee by Southern Union of the trusts' obligations
          under the trust preferred securities.

     o    Each trust is a special purpose entity, has not engaged in any
          activity since its creation, has no independent operations and is not
          engaged in, and does not propose to engage in, any activity other than
          as described under "The Trusts."

                             SOUTHERN UNION COMPANY

         Southern Union Company (Southern Union and together with its
subsidiaries, the Company) was incorporated under the laws of the State of
Delaware in 1932. The Company is primarily engaged in the transportation,
storage and distribution of natural gas in the United States. The Company's
local natural gas distribution operations are conducted through its three
regulated utility divisions:

     o    Missouri Gas Energy, headquartered in Kansas City, Missouri, serving
          approximately 500,000 customers in central and western Missouri
          (including Kansas City, St. Joseph, Joplin and Monett), and having
          7,954 miles of mains, 4,877 miles of service lines and 47 miles of
          transmission lines;

     o    New England Gas Company, headquartered in Providence, Rhode Island,
          serving approximately 300,000 customers in Rhode Island and
          Massachusetts (including Providence, Newport and Cumberland, Rhode
          Island and Fall River, North Attleboro and Somerset, Massachusetts),
          and having 3,635 miles of mains and 3,042 miles of service lines; and

     o    PG Energy, headquartered in Wilkes-Barre, Pennsylvania, serving
          approximately 160,000 customers in northeastern and central
          Pennsylvania (including Wilkes-Barre, Scranton and Williamsport), and
          having 2,504 miles of mains, 1,502 miles of service lines and 29 miles
          of transmission lines.

         Southern Union's interstate natural gas transportation and storage
operations are conducted through it wholly owned subsidiary:

     o    Panhandle Eastern Pipe Line Company, LLC and its subsidiaries
          (hereafter collectively referred to as Panhandle Energy), operate a
          large natural gas pipeline network, consisting of more than 10,000
          miles of pipeline and a liquefied natural gas (LNG) regasification
          plant. The pipeline network provides approximately 500 customers in
          the Midwest and Southwest with a comprehensive array of transportation
          and storage services. Panhandle Energy was acquired by Southern Union
          on June 11, 2003.

         Southern Union also owns and operates various smaller energy-related
operations established to support and expand natural gas sales and other energy
sales.

         Southern Union's strategy is focused on achieving profitable growth and
enhancing stockholder value. The key elements of this strategy include:

     o    Focusing each of our operating units on meeting its allowable rate of
          return. We will continue to focus each of our operating units on
          meeting its allowable rate of return by managing operating costs and
          capital spending, without sacrificing customer safety or quality of
          service. Further, when appropriate, we will continue to seek rate
          increases within each of our operating units.

     o    Maintaining an investment grade rating and credit profile. We will
          continue to seek to enhance our credit profile through increased
          diversification of regulated cash flow and earnings sources and seek
          to reduce over time our ratio of total debt to total capitalization to
          strengthen our balance sheet. The acquisition of Panhandle in June
          2003 assisted in diversifying our regulated cash flow and earnings
          sources.

     o    Expansion through development of our existing businesses. Although our
          existing businesses are subject to limited customer growth, we will
          continue to pursue other growth opportunities to expand our customer
          base which may include the expansion of Panhandle's LNG facility and
          the promotion of non-winter demand such as gas-fired co-generation and
          other off-peak processes.

         Southern Union's corporate headquarters are located at One PEI Center,
Second Floor, Wilkes-Barre, Pennsylvania 18711, where its telephone number is
(570) 820-2400.

                                   THE TRUSTS

         Southern Union Financing II and Southern Union Financing III are each a
statutory business trust created under Delaware law through the execution of a
trust agreement and the filing of a certificate of trust with the Delaware
Secretary of State on March 28, 1995. At the time of public issuance of trust
preferred securities by a trust, the related trust agreement will be amended and
restated in its entirety substantially in the form filed as an exhibit to the
registration statement which includes this prospectus. The amended and restated
trust agreement is referred to as the "trust agreement." Each trust agreement
will be qualified as an indenture under the Trust Indenture Act of 1939. Each
trust exists for the exclusive purposes of:

     o    issuing and selling to the public the trust preferred securities,
          representing undivided beneficial interests in the assets of the
          trust;

     o    issuing and selling to Southern Union common securities, representing
          undivided beneficial interests in the assets of the trust;

     o    investing the gross proceeds from the sale of the trust preferred
          securities and the common securities in subordinated debt securities
          issued by Southern Union;

     o    distributing the cash payments it receives from the subordinated debt
          securities owned by it to the holders of the trust preferred
          securities and the common securities; and

     o    engaging in those other activities necessary or incidental to these
          purposes.

         Each trust has a term of approximately 55 years from formation, but may
terminate earlier as provided in the trust agreement.

         The proceeds from the offering and the sale of the common securities
and the trust preferred securities will be used by each trust to purchase from
Southern Union subordinated debt securities in a total principal amount equal to
the total liquidation preference of the common securities and the trust
preferred securities. The subordinated debt securities will bear interest at an
annual rate equal to the annual distribution rate of the common securities and
the trust preferred securities and will have certain redemption terms which
correspond to the redemption terms for the common securities and the trust
preferred securities. The subordinated debt securities will rank subordinate in
right of payment to all of Southern Union's senior indebtedness (as defined
herein). Distributions on the common securities and the trust preferred
securities issued by a trust may not be made unless the trust receives
corresponding interest payments from Southern Union on the subordinated debt
securities held by it. Southern Union will irrevocably guarantee, on a
subordinated basis and to the extent set forth in the guarantee, with respect to
each of the common securities and the trust preferred securities, the payment of
distributions, the redemption price, including all accrued or deferred and
unpaid distributions, and payment on liquidation, but only to the extent of
funds on hand at the trust. Each guarantee will be unsecured and will be
subordinate to all senior indebtedness of Southern Union. Upon the occurrence of
certain events (subject to the conditions to be described in an accompanying
prospectus supplement), each trust may be liquidated and the holders of the
common securities and trust preferred securities could receive subordinated debt
securities in lieu of any liquidating cash distribution.

         All of the trust common securities will be owned by Southern Union.
Southern Union will, directly or indirectly, in connection with an offering of
trust preferred securities by a trust, purchase common securities of the trust
in an aggregate liquidation amount equal to 3% of the total capital of the
trust.

         Each trust initially will have four trustees. Two of the trustees will
be persons who are employees or officers of or who are affiliated with Southern
Union and will be referred to as the administrative trustees. The third trustee
will be a financial institution that is unaffiliated with Southern Union, which
trustee will serve as property trustee under the applicable trust agreement and
as indenture trustee for the purpose of compliance with the provisions of the
Trust Indenture Act of 1939. Wilmington Trust Company will be the property
trustee until removed or replaced by the holder of the common securities.
Wilmington Trust Company will also act as the Delaware trustee, the fourth
trustee, for the purposes of the Delaware Business Trust Act, until removed or
replaced by the holder of the common securities. Wilmington Trust Company will
also act as guarantee trustee under each trust guarantee. See "Description of
the Trust Guarantees."

         The property trustee will hold title to the subordinated debt
securities for the benefit of the holders of the common securities and the trust
preferred securities. The property trustee will have the power to exercise all
rights, powers and privileges under the applicable indenture as the holder of
the subordinated debt securities. In addition, the property trustee will
maintain exclusive control of a segregated non-interest bearing bank account to
hold all payments made in respect of the subordinated debt securities for the
benefit of the holders of the common securities and the trust preferred
securities. The property trustee will make payments of the distributions and
payments on liquidation, redemption and otherwise to the holders of the common
securities and the trust preferred securities out of funds from the segregated
non-interest bearing bank account. The guarantee trustee will hold the
guarantees for the benefit of the holders of the common securities and the trust
preferred securities.

         Southern Union, as the holder of all the common securities, will have
the right to appoint, remove or replace any of the trustees. Southern Union will
also have the right to increase or decrease the number of trustees, as long as
the number of trustees shall be at least three, a majority of which shall be
administrative trustees. Southern Union will pay all fees and expenses related
to the trusts and the offering of the common securities and the trust preferred
securities.

         The rights of the holders of the trust preferred securities, including
economic rights, rights to information and voting rights, are set forth in the
applicable trust agreement, the Delaware Business Trust Act and the Trust
Indenture Act of 1939.

         The office of the Delaware trustee for each trust is Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890. The address for each trust is c/o Southern Union Company, One PEI Center,
Second Floor, Wilkes-Barre, Pennsylvania 18711, telephone (570) 820-2400.

                                 USE OF PROCEEDS

         The net proceeds received by Southern Union from the issuance of the
offered securities will be used for general corporate purposes, including:

     o    repurchases of outstanding debt securities;

     o    repayment of other borrowings, including short-term borrowings under
          bank credit agreements; and

     o    as otherwise disclosed in any supplement to this prospectus.

         The proceeds received by each of the trusts from the sale of its trust
preferred securities and common securities will be invested in subordinated debt
securities issued by Southern Union and Southern Union in turn will use the
proceeds from the issuance of subordinated debt securities for the purposes
stated above.

         The prospectus supplement for a particular offering will provide a more
detailed description of the use of the net proceeds from such offering. Southern
Union may invest any funds it does not require immediately in marketable
securities and short-term investments.

                   RATIO OF EARNINGS TO COMBINED FIXED CHARGES
                    AND PREFERRED STOCK DIVIDEND REQUIREMENTS

         The following table sets forth the ratio of earnings to combined fixed
charges and preferred stock dividend requirements on an historical basis for
each of the five years in the period ended June 30, 2003, and for the nine-month
period ended March 31, 2004. For the purpose of calculating such ratios,
"earnings" consist of income from continuing operations before income taxes and
fixed charges. "Fixed charges" consist of interest expense, amortization of debt
discount or premium and an estimate of interest implicit in rentals.
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<CAPTION>

                                                                          Year Ended June 30,
                                           Nine Months Ended       2003    2002    2001    2000    1999
                                             March 31, 2004        ----    ----    ----    ----    ----
                                           -----------------


<S>                                               <C>              <C>     <C>     <C>
Ratio of Earnings to Fixed Charges                2.53             1.72    1.05    1.61    --*     --*
</TABLE>





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*    The earnings were inadequate to cover fixed charges by approximately $12.4
     million and $13.5 million for the years ended June 30, 2000 and 1999,
     respectively. In accordance with generally accepted accounting principles,
     the Company did not allocate interest expense or other corporate costs to
     discontinued operations for all periods presented, resulting in the
     recognition of losses from continuing operations for the years ended June
     30, 2000 and 1999. All outstanding debt of Southern Union Company and
     subsidiaries, but for Panhandle Energy, is maintained at the corporate
     level.

                            DESCRIPTION OF SECURITIES

         The following is a general description of the terms and provisions of
the securities we may offer and sell by this prospectus. These summaries are not
meant to be a complete description of each security. This prospectus and any
accompanying prospectus supplement will contain the material terms and
conditions for each security. The accompanying prospectus supplement may add,
update or change the terms and conditions of the securities as described in this
prospectus. For more information about the securities offered by us, please
refer to:

     o    the indenture between Southern Union and JP Morgan Chase Bank, as
          trustee, relating to the issuance of each series of senior debt
          securities by Southern Union (the "senior indenture");

     o    the indenture between Southern Union and JP Morgan Chase Bank, as
          trustee, relating to the issuance of each series of subordinated debt
          securities by Southern Union (the "subordinated indenture");

     o    the Declaration of each trust; and

     o    Southern Union's guarantee of the trust preferred securities issued by
          each trust.

         Forms of these documents are filed as exhibits to the registration
statement. The indentures listed above are sometimes collectively referred to as
the "indentures" and individually referred to as an "indenture." The indentures
are subject to and governed by the Trust Indenture Act of 1939, as amended, and
may be supplemented or amended from time to time following their execution.

                         DESCRIPTION OF DEBT SECURITIES

         Unless indicated differently in a prospectus supplement, the following
description sets forth the general terms and provisions of the debt securities
that Southern Union may offer by this prospectus. The debt securities may be
issued as either senior debt securities or subordinated debt securities.

         The senior debt securities will be governed by the senior indenture and
the subordinated debt securities will be governed by the subordinated indenture.
Each indenture gives the issuer broad authority to set the particular terms of
each series of debt securities, including the right to modify certain of the
terms contained in the indenture. The particular terms of a series of debt
securities and the extent, if any, to which the particular terms of the issue
modify the terms of the applicable indenture will be described in the
accompanying prospectus supplement relating to such series of debt securities.

         Each indenture contains the full legal text of the matters described in
this section. Because this section is a summary, it does not describe every
aspect of the debt securities or the applicable indenture. This summary is
subject to and qualified in its entirety by reference to all the provisions of
the applicable indenture, including definitions of terms used in such indenture.
Whenever we refer to defined terms of the indentures in this prospectus or in a
prospectus supplement, these sections or defined terms are incorporated by
reference into this prospectus or into the prospectus supplement. This summary
also is subject to and qualified by reference to the description of the
particular terms of a particular series of debt securities described in the
applicable prospectus supplement or supplements. Keep in mind that it is the
indentures and not this summary that defines your rights. There may be other
provisions which also are important to you. Each indenture is filed as an
exhibit to the registration statement that includes this prospectus. See "Where
You Can Find More Information" for information on how to obtain a copy of the
indentures.

General

         Southern Union may issue an unlimited amount of debt securities under
the indentures in one or more series. The Company is not required to issue all
debt securities of one series at the same time and, unless otherwise provided in
a prospectus supplement, may reopen a series, without the consent of the holders
of the debt securities of that series, for issuances of additional debt
securities of that series. The debt securities of Southern Union will be
unsecured obligations of the Company.

         Prior to the issuance of each series of debt securities, the terms of
the particular securities will be specified in either a supplemental indenture
(including any pricing supplement) and a board resolution of Southern Union or
in one or more officers' certificates of Southern Union pursuant to a
supplemental indenture or a board resolution, both of which will be made
publicly available in a filing we will make with the SEC with respect to any
offering of debt securities. We refer you to the applicable prospectus
supplement for a description of the following terms of each series of debt
securities:

     o    the title and type of the debt securities;

     o    the total principal amount of the debt securities and the currency, if
          other than U.S. dollars, in which such notes are denominated;

     o    the percentage of the principal amount at which the debt securities
          will be issued and any payments due if the maturity of the debt
          securities is accelerated;

     o    the dates on which the principal of the debt securities will be
          payable and the terms on which any such maturity date may be extended;

     o    the interest rate which the debt securities will bear and the interest
          payment dates for the debt securities--any optional redemption
          periods;

     o    any sinking fund or other provisions that would obligate us to
          repurchase or otherwise redeem some or all of the debt securities;

     o    any changes to or additional events of default or covenants;

     o    any special tax implications of the debt securities, including
          provisions for original issue discount securities, if offered;

     o    any conversion privileges, and the terms and conditions of such
          conversion, including provision for adjustments of the conversion rate
          in such events as the Board of Directors shall determine;

     o    restrictions on the declaration of dividends on our capital stock
          (other than dividends in such stock) or requiring the maintenance of
          any asset ratio or the creation or maintenance of reserves; and

     o    any other terms of the debt securities.

Ranking

         The senior debt securities will be our unsecured and unsubordinated
obligations. The indebtedness represented by the senior debt securities will
rank equally with all our other unsecured and unsubordinated debt, except that
the senior debt securities will be senior in right of payment to any
subordinated indebtedness which states in its terms that it is subordinate to
the senior debt securities. We have outstanding debt securities which are
secured by mortgages on assets in our PG Energy and New England divisions. As a
result, those securities have priority with respect to those mortgaged assets.
The indebtedness represented by the subordinated debt securities will rank
junior and subordinate in right of payment to our prior payment in full of our
senior debt, to the extent and in the manner set forth under the caption
"--Subordination" below and as may be set forth in a prospectus supplement from
time to time. The debt securities are obligations of Southern Union exclusively,
and are not the obligations of any of our subsidiaries.

Denominations

         The prospectus supplement for each issuance of debt securities will
state whether the securities will be issued in registered form of $1,000 each or
multiples of $1,000 or such lesser amount as may be indicated in a prospectus
supplement for a specific series of debt securities, or bearer form of $5,000
each, or global form.

Covenants

         Under the indentures, we will:

     o    pay the principal of, and interest and any premium on, the debt
          securities when due;

     o    maintain a place of payment;

     o    deliver a report to the trustee at the end of each fiscal year
          reviewing our obligations under the indenture; and

     o    deposit sufficient funds with any paying agent on or before the due
          date for any principal, interest or premium.

Consolidations, Mergers and Sales

         The indenture provides that we will not consolidate with or merge with
or into any other entity, or convey, transfer or lease, or permit one or more of
our subsidiaries to convey, transfer or lease, all or substantially all of our
properties and assets on a consolidated basis to any entity, unless:

     o    either we are the continuing corporation or such corporation or entity
          assumes by supplemental indenture all of our obligations under the
          debt securities and their respective indentures;

     o    no default or event of default is existing immediately after the
          transaction; and

     o    the surviving entity is a corporation, partnership or trust organized
          and validly existing under the laws of the United States of America,
          any state of the United States or the District of Columbia.

Liens

         Pursuant to the indenture, we will not, and we will not permit any
subsidiary to, create, incur, issue or assume any debt secured by any lien on
any property or assets owned by us or any of our subsidiaries, and we will not
permit any of our subsidiaries to, create, incur, issue or assume any debt
secured by any lien on any shares of stock or debt of any subsidiary (such
shares of stock or debt of any subsidiary being called "restricted securities"),
unless

     o    in the case of new debt which is expressly by its terms subordinate or
          junior in right of payment to the applicable series of debt
          securities, the applicable series of debt securities are secured by a
          lien on such property or assets that is senior to the new lien with
          the same relative priority as such subordinated debt has with respect
          to the applicable series of debt securities; or

     o    in the case of liens securing new debt that is ranked equally with the
          applicable series of debt securities, the applicable series of debt
          securities are secured by a lien on such property or assets that is
          equal and ratable with the new lien, except that any lien securing
          such debt securities may be junior to any lien on our accounts
          receivable, inventory and related contract rights securing debt under
          our revolving credit facility.

These restrictions do not prohibit Southern Union from creating any of the
following liens:

     (1)  any liens on any of our property, assets or restricted securities or
          those of any subsidiary existing as of the date of the first issuance
          by us of the debt securities issued pursuant to the indenture, or such
          other date as may be specified in a prospectus supplement for an
          applicable series of debt securities issued pursuant to the indenture,
          subject to the provisions of subsection (8) below;

     (2)  liens on any property or assets or restricted securities of any
          corporation existing at the time such corporation becomes a
          subsidiary, or arising after such time (a) otherwise than in
          connection with the borrowing of money arranged after the corporation
          became a subsidiary and (b) pursuant to contractual commitments
          entered into prior to and not in contemplation of such corporation
          becoming a subsidiary;

     (3)  liens on any of our property, assets or restricted securities or those
          of any subsidiary existing at the time of acquisition of such
          property, assets or securing the payment of all or any part of the
          purchase price or construction cost of such property, assets or
          restricted securities, or securing any debt incurred prior to, at the
          time of or within 120 days after the later of the date of the
          acquisition of such property, assets or restricted securities or the
          completion of any such construction, for the purpose of financing all
          or any part of the purchase price or construction cost;

     (4)  liens on any property or assets to secure all or any part of the cost
          of development, operation, construction, alteration, repair or
          improvement of all or any part of such property or assets or to secure
          debt incurred by us or any of our subsidiaries prior to, at the time
          of or within 120 days after, the completion of such development,
          operation, construction, alteration, repair or improvement, whichever
          is later, for the purpose of financing all or any related costs;

     (5)  liens in favor of the trustee for the benefit of the holders and
          subsequent holders of the debt securities securing the debt
          securities;

     (6)  liens secured by any of our property or assets or those of any
          subsidiary that comprise no more than 20% of Consolidated Net Tangible
          Assets (as defined under "Terms Described in the Indenture" below);

     (7)  liens which secure senior indebtedness owing by a subsidiary to us or
          to another subsidiary; and

     (8)  any extension, renewal, substitution or replacement in whole or in
          part, of any of the liens referred to above or the debt secured by the
          liens; provided that:

     (a)  such extension, renewal, substitution or replacement lien will be
          limited to all or any part of the same property, assets or restricted
          securities that secured the prior lien plus improvements on such
          property and plus any other property or assets not then owned by us or
          one of our subsidiaries or constituting restricted securities; and

     (b)  in the case of items (1) through (3) above, the debt secured by such
          lien at such time is not increased.

If we give a guarantee that is secured by a lien on any property or assets or
restricted securities, or we create a lien on any property or assets or
restricted securities to secure debt that existed prior to the creation of such
lien, the indenture will deem that we have created debt in an amount equal to
the principal amount guaranteed or secured by such lien. The amount of debt
secured by liens on property, assets and restricted securities will be computed
without cumulating the indebtedness with any guarantee or lien securing the same
indebtedness.

Limitation on Sale and Leaseback Transactions

         The indentures also provide that we will not, nor will we permit any of
our subsidiaries to, engage in a sale-leaseback transaction, unless:

     (1)  the sale-leaseback transaction involves a lease for a period,
          including renewals, of not more than three years;

     (2)  we or any of our subsidiaries, within 180 days after such
          sale-leaseback transaction, apply or cause to be applied an amount not
          less than the net sale proceeds from such sale-leaseback transaction
          to the repayment, redemption or retirement of our funded debt or
          funded debt of any such subsidiary; or

     (3)  the Attributable Debt (as defined below under "Terms Described in the
          Indenture") from such sale-leaseback transaction, together with all
          other sale and leaseback transactions entered into after the date of
          the first issuance by us of debt securities pursuant to the indenture
          other than sale-leaseback transactions permitted by clauses (1) and
          (2) above does not exceed 20% of our Consolidated Net Tangible Assets
          (as defined below under "Terms Described in the Indenture" below).

Events of Default

         The indentures provide that any one of the following events is an event
of default:

     o    failure to pay any interest or any additional amounts due on any debt
          security, or of any coupon, for 30 days;

     o    failure to pay the principal of or any premium on any debt security
          when due, whether at maturity, upon redemption, by declaration or
          otherwise;

     o    failure to perform any other covenant or agreement in the indenture
          which continues for 60 days after written notice is given to us by the
          trustee or the holders of at least 25% of the outstanding debt
          securities of that series;

     o    cross-acceleration of our other debt in excess of 10% of our
          consolidated net worth;

     o    events in any bankruptcy, insolvency or reorganization of our company;

     o    any other event of default listed in the indenture for debt securities
          of that series.

         We are required to file annually with the trustee an officer's
certificate as to our compliance with all conditions and covenants under the
indenture. The indenture permits the trustee to withhold notice to the holders
of debt securities of any default, except in the case of a failure to pay the
principal of (or premium, if any), or interest on, any debt securities or the
payment of any sinking fund installment with respect to such securities, if the
trustee considers it in the interest of the holders of debt securities to do so.

         If an event of default, other than events with respect to our
bankruptcy, insolvency and reorganization or that of any of our significant
subsidiaries, occurs and is continuing with respect to debt securities, the
trustee or the holders of at least 25% in principal amount of outstanding debt
securities of that series may declare the outstanding debt securities of that
series due and payable immediately. If our bankruptcy, insolvency or
reorganization, or that of any of our significant subsidiaries, causes an event
of default for debt securities of a particular series, then the principal of all
the outstanding debt securities of that series, and accrued and unpaid interest
thereon, will automatically be due and payable without any act on the part of
the trustee or any holder.

         If an event of default with respect to debt securities of a particular
series occurs and is continuing, the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request or
direction of any of the holders of debt securities of such series (other than
duties listed in the indenture), unless such holders offer to the trustee
reasonable indemnity and security against the costs, expenses and liabilities
that might be incurred by the trustee to comply with the holders' request. If
they provide this indemnity to the trustee, the holders of a majority in
principal amount of the outstanding debt securities of such series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the trustee under the indenture, or exercising any trust or
power given to the trustee with respect to the debt securities of that series.
The trustee may refuse to follow directions in conflict with law or the
indenture that may subject the trustee to personal liability or may be unduly
prejudicial to holders not joining in such directions.

         The holders of not less than a majority in principal amount of the
outstanding debt securities of any series may, on behalf of the holders of all
the debt securities of such series and any related coupons, waive any past
default under the indenture with respect to such series and its consequences,
except a default:

     o    in the payment of the principal of (or premium, if any) or interest on
          or additional amounts payable in respect of any debt security of such
          series unless such default has been cured and a sum sufficient to pay
          all matured installments of interest and principal due otherwise than
          by acceleration and any applicable premium has been deposited with the
          trustee; or

     o    in respect of a covenant or provision that cannot be modified or
          amended without the consent of the holder of each outstanding debt
          security of such series affected by the modification or amendment.

Modification or Waiver

         We and the trustees may modify and amend the indentures with the
consent of the holders of not less than a majority in principal amount of all
outstanding indenture securities or any series that is affected by such
modification or amendment. The consent of the holder of each outstanding debt
security of a series is required in order to:

     o    change the stated maturity of the principal of (or premium, if any),
          or any installment of principal or interest on any debt security of
          such series;

     o    reduce the principal amount or the rate of interest on or any
          additional amounts payable, or any premium payable upon the redemption
          of such series;

     o    change our obligation to pay additional amounts in respect of any debt
          security of such series;

     o    reduce the amount of principal of a debt security that is an original
          issue discount security and would be due and payable upon a
          declaration of acceleration of the maturity of that debt security;

     o    adversely affect any right of repayment at the option of the holder of
          any debt security of such series;

     o    change the place or currency of payment of principal of, or any
          premium or interest on, any debt security of such series;

     o    impair the right to institute suit for the enforcement of any such
          payment on or after the stated maturity of the debt security or any
          redemption date or repayment date for the debt security;

     o    reduce the percentage of holders of outstanding debt securities of
          such series necessary to modify or amend the indenture or to consent
          to any waiver under the indenture or reduce the requirements for
          voting or quorum described below;

     o    modify the change of control provisions, if any;

     o    reduce the percentage of outstanding debt securities of such series
          necessary to waive any past default; or

     o    modify any of the above requirements.

         We and the trustees may modify and amend the indentures without the
consent of any holder for the following purposes:

     o    to evidence the succession of another entity to us as obligor under an
          indenture;

     o    to add to our covenants for the benefit of the holders of all or any
          series of debt securities;

     o    to add events of default for the benefit of the holders of all or any
          series of debt securities;

     o    to add or change any provisions of the indentures to facilitate the
          issuance of bearer securities;

     o    to change or eliminate any provisions of the indentures but only if
          any such change or elimination will become effective only when there
          are no outstanding debt securities of any series created prior to the
          change or elimination that is entitled to the benefit of such
          provision;

     o    to establish the form or terms of debt securities of any series and
          any related coupons;

     o    secure the debt securities;

     o    to provide for the acceptance of appointment by a successor trustee or
          facilitate the administration of the trusts under the indentures by
          more than one trustee; and

     o    to change the indentures with respect to the authentication and
          delivery of additional series of debt securities, in order to cure any
          ambiguity, defect or inconsistency in the indentures, but only if such
          action does not adversely affect the interest of holders of debt
          securities of any series in any material respect.

         The indentures contain provisions for convening meetings of the holders
of debt securities of a series if debt securities of that series are issuable as
bearer securities. A meeting may be called at any time by the trustee and also
by such trustee pursuant to a request made to the trustee by us or the holders
of at least 10% in principal amount of the debt securities of such series
outstanding. In any case, notice must be given as provided in the indentures.
Any resolution presented at a meeting or duly reconvened adjourned meeting at
which a quorum is present may be adopted by the affirmative vote of the holders
of a majority in principal amount of the debt securities of that series, except
for any consent that must be given by the holder of each debt security affected,
as described above in this section. Any resolution passed or decision made in
accordance with the indentures at any duly held meeting of holders of debt
securities of any series will be binding on all holders of the debt securities
of that series and any related coupons. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will consist of persons
entitled to vote a majority in principal amount of the debt securities of a
series outstanding, unless a specified percentage in principal amount of the
debt securities of a series outstanding is required for the consent or waiver,
then the persons entitled to vote such specified percentage in principal amount
of the outstanding debt securities of such series will constitute a quorum.
However, if any action is to be taken at a meeting of holders of debt securities
of any series with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that the indentures expressly provide
may be made, given or taken by the holders of a specified percentage in
principal amount of all outstanding debt securities affected, or of the holders
of such series of debt securities and one or more additional series, then:

     o    there will be no minimum quorum requirement for such meeting; and

     o    the principal amount of the outstanding debt securities of such series
          that vote in favor of such request, demand, authorization, direction,
          notice, consent, waiver or other action will be taken into account in
          determining whether such request, demand, authorization, direction,
          notice, consent, waiver or other action has been made, given or taken
          under the indentures.

Defeasance

         We will be discharged from our obligations on the debt securities of
any series at any time if we deposit with the trustee sufficient cash or
government securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or a redemption date of the debt securities
of the series. If this happens, the holders of the debt securities of the series
will not be entitled to the benefits of the indenture except for registration of
transfer and exchange of debt securities and replacement of lost, stolen or
mutilated debt securities.

         Under U.S. federal income tax laws as of the date of this prospectus, a
discharge may be treated as an exchange of the related debt securities. Each
holder might be required to recognize gain or loss equal to the difference
between the holder's cost or other tax basis for the debt securities and the
value of the holder's interest in the trust. Holders might be required to
include as income a different amount than would be includable without the
discharge. Prospective investors should seek tax advice to determine their
particular consequences of a discharge, including the applicability and effect
of tax laws other than the U.S. federal income tax laws.

Financial Information

         While the debt securities are outstanding, we will file with the SEC,
to the extent permitted under the Exchange Act, the annual reports, quarterly
reports and other documents otherwise required to be filed with the SEC pursuant
to Section 13(a) or 15(d) of the Exchange Act even if we stop being subject to
those sections, and we will also provide to all holders and file with the
trustee copies of such reports and documents within 15 days after filing them
with the SEC or, if our filing such reports and documents with the SEC is not
permitted under the Exchange Act, within 15 days after we would have been
required to file such reports and documents if permitted, in each case at our
cost.

Terms Described in the Indentures

         Attributable Debt means, with respect to a lease under which any entity
is liable for a term of more than 12 months, the total net amount of rent
required to be paid by the entity under such lease during the remaining term
(excluding any subsequent renewal or other extension options held by the
lessee), discounted from the respective due dates of the rent to the date that
the Attributable Debt is being determined at a rate equal to the weighted
average of the interest rates borne by the outstanding debt securities,
compounded monthly. The net amount of rent required to be paid under any lease
for any such period will be the aggregate amount of the rent payable by the
lessee with respect to such period after excluding any amounts required to be
paid on account of maintenance and repairs, services, insurance, taxes,
assessments, water rates and similar charges and contingent rents (such as those
based on sales). In the case of any lease that is terminable by the lessee upon
the payment of a penalty, such net amount of rent will include the lesser of:

     o    the total discounted net amount of rent required to be paid from the
          later of the first date upon which such lease may be so terminated or
          the date of the determination of such net amount of rent, and

     o    the amount of such penalty (in which event no rent shall be considered
          as required to be paid under such lease subsequent to the first date
          upon which it may be so terminated).

         Consolidated Net Tangible Assets means the total amount of our assets
and those of our consolidated subsidiaries (less applicable reserves and other
properly deductible items) after deducting:

     o    all current liabilities (excluding any current liabilities that are by
          their terms extendible or renewable at the option of the obligor to a
          time more than 12 months after the time as of which the amount of the
          Consolidated Net Tangible Assets is being computed) and

     o    all goodwill, trade names, trademarks, patents, unamortized debt
          discount and expense and other like intangibles, all as set forth on
          our most recent consolidated balance sheet and computed in accordance
          with generally accepted accounting principles.

Payment, Registration and Transfer

         Unless we specify otherwise in a prospectus supplement, we will pay
principal, interest and any premium on the debt securities, and they may be
surrendered for payment or transferred, at the offices of the trustee. We will
make payment on registered securities by checks mailed to the persons in whose
names the debt securities are registered or by transfer to an account maintained
by the registered holder on days specified in the indenture or any prospectus
supplement. If we make debt securities payments in other forms, we will specify
the form and place in a prospectus supplement.

         We will maintain a corporate trust office of the trustee or another
office or agency for the purpose of transferring or exchanging fully registered
securities, without the payment of any service charge except for any tax or
governmental charge.

         The debt securities may be issued as registered securities or bearer
securities. Registered securities will be securities recorded in the securities
register kept at the corporate office of the trustee for the trust that issued
that series of securities. A bearer security is any debt security other than a
registered security. Registered securities will be exchangeable for other
registered securities of the same series and of a like aggregate principal
amount and tenor in different authorized denominations. If (but only if)
provided for in any prospectus supplement, bearer securities (with all unmatured
coupons, except as provided below, and all matured coupons in default) of any
series may be exchanged for registered securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor. In
such event, bearer securities surrendered in a permitted exchange for registered
securities between a regular record date and the relevant date for payment of
interest will be surrendered without the coupon relating to such date for
payment of interest. Interest will not be payable on such date on the registered
security issued in exchange for such bearer security but will be payable only to
the holder of such coupon when due, in accordance with the terms of the
indenture. Unless otherwise specified in any prospectus supplement, bearer
securities will not be issued in exchange for registered securities.

         In the event of any redemption of debt securities, we will not be
required to:

     o    issue, register the transfer of or exchange debt securities of any
          series during a period beginning at the opening of business 15 days
          before any selection of debt securities of that series to be redeemed
          and ending at the close of business on (a) the day of mailing of the
          relevant notice of redemption if debt securities of the series are
          issuable only as registered securities, (b) the day of mailing of the
          relevant notice of redemption if the debt securities of the series are
          also issuable as registered securities and there is no publication,
          and (c) the day of the first publication of the relevant notice of
          redemption if the debt securities are issuable as bearer securities.

     o    register the transfer of or exchange any registered security, or
          portion thereof, called for redemption, except the unredeemed portion
          of any registered security being redeemed in part;

     o    exchange any bearer security selected for redemption, except to
          exchange such bearer security for a registered security of that series
          and like tenor that simultaneously is surrendered for redemption; or

     o    issue, register the transfer of or exchange any debt securities that
          have been surrendered for repayment at the option of the holder,
          except any portion not to be repaid.

Subordination

         Unless indicated differently in a prospectus supplement, Southern
Union's subordinated debt securities will be subordinated in right of payment to
the prior payment in full of all of its senior debt. This means that, upon:

(a)             any distribution of the assets of Southern Union upon its
                dissolution, winding-up, liquidation or reorganization in
                bankruptcy, insolvency, receivership or other proceedings; or

(b)             acceleration of the maturity of the subordinated debt
                securities; or

(c)             a failure to pay any senior debt or interest thereon when due
                and continuance of that default beyond any applicable grace
                period; or

(d)             acceleration of the maturity of any senior debt as a result of a
                default, the holders of all of Southern Union's senior debt will
                be entitled to receive:

     o    in the case of clauses (a) and (b) above, payment of all amounts due
          or to become due on all senior debt;

     o    and in the case of clauses (c) and (d) above, payment of all amounts
          due on all senior debt,

         before the holders of any of the subordinated debt securities are
         entitled to receive any payment. So long as any of the events in
         clauses (a), (b), (c) or (d) above has occurred and is continuing, any
         amounts payable on the subordinated debt securities will instead be
         paid directly to the holders of all senior debt to the extent necessary
         to pay the senior debt in full and, if any payment is received by the
         subordinated indenture trustee under the subordinated indenture or the
         holders of any of the subordinated debt securities before all senior
         debt is paid in full, the payment or distribution must be paid over to
         the holders of the unpaid senior debt. Subject to paying the senior
         debt in full, the holders of the subordinated debt securities will be
         subrogated to the rights of the holders of the senior debt to the
         extent that payments are made to the holders of senior debt out of the
         distributive share of the subordinated debt securities.

         "Senior debt" means with respect to the subordinated debt securities,
the principal of, and premium, if any, and interest on and any other payment in
respect of indebtedness due pursuant to any of the following, whether
outstanding on the date the subordinated debt securities are issued or
thereafter incurred, created or assumed;

     o    indebtedness of Southern Union for money borrowed by Southern Union or
          evidenced by securities, debentures (other than the subordinated debt
          securities), bonds or similar instruments issued by Southern Union,
          including any of Southern Union's mortgage bonds;

     o    capital lease obligations of Southern Union;

     o    obligations of Southern Union incurred for deferring the purchase
          price of property, with respect to conditional sales, or under any
          title retention agreement (but excluding trade accounts payable
          arising in the ordinary course of business);

     o    obligations of Southern Union with respect to letters of credit,
          banker's acceptances, security purchase facilities or similar credit
          transitions; and

     o    all indebtedness of others of the type referred to in the four
          preceding clauses assumed by or guaranteed in any manner by Southern
          Union or in effect guaranteed by Southern Union.

         Due to the subordination, if assets of Southern Union are distributed
upon insolvency, certain of its general creditors may recover more, ratably,
than holders of subordinated debt securities. The subordination provisions will
not apply to money and securities held in trust under the satisfaction and
discharge and the defeasance provisions of the applicable subordinated
indenture.

         The subordinated debt securities, the subordinated indenture and the
trust preferred securities guarantee do not limit Southern Union's ability to
incur additional indebtedness, including indebtedness that will rank senior to
subordinated debt securities and trust preferred securities guarantees. Southern
Union expects that it will incur substantial additional amounts of indebtedness
in the future.

Conversion Rights

         The terms and conditions of any series of debt securities being offered
that are convertible into common stock of Southern Union will be set forth in a
prospectus supplement. These terms will include the conversion price, the
conversion period, provisions as to whether conversion will be at the option of
the holder or the company issuing the debt securities, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event that such series of debt securities are redeemed.

Governing Law

         Each indenture and the related debt securities will be governed by and
construed in accordance with the laws of the State of New York.

                  DESCRIPTION OF SOUTHERN UNION'S COMMON STOCK
                               AND PREFERRED STOCK

         Unless indicated differently in a prospectus supplement, this section
describes the terms of Southern Union's common stock and preferred stock. The
following description of Southern Union's common stock and preferred stock is
only a summary. The description of Southern Union's preferred stock is qualified
in its entirety by reference to the certificate of incorporation and bylaws of
Southern Union. Keep in mind that it is the certificate of incorporation and the
bylaws that will define your rights as a holder of either Southern Union common
stock or Southern Union preferred stock. Therefore, you should read carefully
the more detailed provisions of Southern Union's restated certificate of
incorporation, as amended, and Southern Union's bylaws, as amended, copies of
which are incorporated by reference as exhibits to the registration statement of
which this prospectus is a part.

General

         The authorized capital stock of Southern Union consists of (1)
200,000,000 shares of Southern Union common stock, par value $1 per share, and
(2) 6,000,000 shares of preferred stock, no par value. As of December 31, 2003,
there were 72,965,504 issued and outstanding shares of Southern Union common
stock and 920,000 shares of Southern Union preferred stock issued and
outstanding. No other classes of capital stock are authorized under the Southern
Union restated certificate of incorporation, as amended. The issued and
outstanding shares of Southern Union common stock are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights.

                           SOUTHERN UNION COMMON STOCK

         Except with respect to the election of directors, the holders of
Southern Union common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. At all elections of
directors of Southern Union, the holders of Southern Union common stock is
entitled to that number of votes which equals the number of shares held by such
stockholder multiplied by the number of directors to be elected, and such
stockholder may cast all of such votes for a single nominee or distribute them
among the nominees as such stockholder deems appropriate.

         The holders of Southern Union common stock are entitled to receive
dividends as and when declared by the Southern Union board out of funds legally
available therefore, subject to any preferential dividend rights of outstanding
shares of Southern Union preferred stock.

         Subject to the rights of holders of Southern Union cumulative preferred
stock, upon liquidation, dissolution or winding up of Southern Union, the
holders of Southern Union common stock are entitled to receive ratably the net
assets of Southern Union available after the payment of all debts and other
liabilities.

         Holders of Southern Union common stock have no preemptive,
subscription, redemption or conversion rights.

Other Considerations Relating to Southern Union Common Stock

         In September of 2000, Southern Union completed its acquisition of Fall
River Gas and ProvEnergy. Southern Union is a Delaware corporation. As discussed
above, the rights of a holder of Southern Union's restated certificate of
incorporation are presently governed by Southern Union's restated certificate of
incorporation and by bylaws and the Delaware General Corporation Law ("DGCL").
In effecting the merger with Fall River Gas and ProvEnergy, Southern Union also
became subject to the provisions of Chapter 164 of Massachusetts General Law
("MGL"), which governs the rates and terms of service provided by gas and
electric utilities operating in Massachusetts.

         Following the merger with Fall River Gas, Southern Union has continued
to exist as a Delaware corporation and Southern Union's restated certificate of
incorporation and bylaws have survived, rather than those of Fall River Gas. As
a gas utility operating in Massachusetts, Southern Union is exempt from the
provisions of Massachusetts business law (Chapter 156B), except to the extent
that any provisions are incorporated into Chapter 164. Chapter 164 incorporates
only minor aspects of the corporate governance provisions of Chapter 156B. But
for a limited exception discussed below, there are no material differences
between those provisions and the provisions of DGCL.

         With respect to Southern Union, the single material difference between
the provisions of Chapter 164 and the DGCL pertains to the requirements of
shareholder approval in the limited circumstance where there is a merger
involving Southern Union and another gas utility operating in Massachusetts.
This type of transaction would require approval by the Massachusetts Department
of Telecommunications and Energy ("MDTE"). The applicable provision of Chapter
164 requires a vote approving the merger by two-thirds of the Company's
shareholders; whereas, under DGCL, only a majority of shareholders must approve
a merger. It remains Southern Union's intention while conducting its corporate
governance activities to comport with the requirements of DGCL; however, in
these limited circumstances, namely a future merger between Southern Union and
another gas or electric utility operating in Massachusetts subject to Chapter
164, the Company would have to abide by the more stringent requirement of the
MGL to obtain a two-thirds shareholder vote in favor of the merger in order to
receive approval for the transaction from the MDTE. However, in meeting this
requirement of Chapter 164 of the MGL, the Company would also have met the lower
threshold required by the DGCL.

         In addition, a company operating as a utility in either Massachusetts
or Pennsylvania, cannot issue a stock dividend without approval from the MDTE or
the Pennsylvania Public Utilities Commission ("Pa. PUC"), as applicable.
Historically, we have had a policy of declaring and distributing an annual 5%
stock dividend. Since our 2001 dividend, we have sought and received approval
for such dividend from both agencies.

         The registrar and transfer agent for the Southern Union common stock is
BankBoston, N.A. c/o EquiServe, L.P.

                         SOUTHERN UNION PREFERRED STOCK

         Southern Union, by resolution of the Southern Union board and without
any further vote or action by the holders of Southern Union common stock, has
the authority, subject to certain limitations, to issue up to an aggregate of
6,000,000 shares of Southern Union preferred stock in one or more classes or
series, and to determine the designation and the number of shares of any class
or series and to fix the designation, powers, preferences and rights of each
such series and the qualifications, limitations or restrictions thereof.
Currently, there are 920,000 shares of Southern Union preferred stock
outstanding.

         Prior to the issuance of shares of each series of Southern Union
preferred stock, the Board of Directors is required to adopt resolutions and
file a certificate of designation with the Secretary of State of the State of
Delaware with respect to the preferred stock, both of which we will make
publicly available in a filing we will make with the SEC with respect to any
offering of preferred stock. The certificate of designation will fix for each
series the designation and number of shares and the rights, preferences,
privileges and restrictions of the shares including, but not limited to, the
following:

(a)             the number of shares constituting that series and the
                distinctive designation of each such series;

(b)             the dividend rate on the shares of that series, whether
                dividends shall be cumulative, and, if so, from which date or
                dates, and the relative rights of priority, if any, of payment
                of dividends on shares of each series;

(c)             whether each series shall have voting rights, in addition to the
                voting rights provided by law, and if so, the terms of such
                voting rights;

(d)             whether each series shall have conversion privileges, and, if
                so, the terms and conditions of such conversion, including
                provision for adjustment of the conversion rate in such events
                as the Board of Directors shall determine;

(e)             whether or not the shares of each series shall be redeemable,
                and, if so, the terms and conditions of such redemption,
                including the date or date upon or after which they shall be
                redeemable, and the amount per share payable in case or
                redemption, which amount may vary under different conditions and
                at different redemption dates;

(f)             whether each series shall have a sinking fund for the redemption
                or purchase of shares of each such series, and if so, the terms
                and amount of such sinking fund;

(g)             the rights of the shares of each series in the event of
                voluntary or involuntary liquidation, dissolution or winding up
                of Southern Union, and the relative rights of priority, if any,
                of payment of shares of each series; and

(h)             any other relative rights, preferences and limitations of each
                series.

         All shares of Southern Union preferred stock will, when issued, be
fully paid and nonassessable and will not have any preemptive or similar rights.

         In addition to the terms listed above, we will set forth in a
prospectus supplement the following terms relating to the class or series of
Southern Union preferred stock being offered:

(a)             the number of shares of the Southern Union preferred stock
                offered, the liquidation preference per share and the offering
                price of the Southern Union preferred stock;

(b)             the procedures for any auction and remarketing, if any, for the
                Southern Union preferred stock;

(c)             any listing of the preferred stock on any securities exchange;
                and

(d)             a discussion of any material and/or special United States
                federal income tax considerations applicable to the Southern
                Union preferred stock.

Rank

         The Southern Union preferred stock will rank, with respect to dividends
and upon our liquidation, dissolution or winding up:

(a)             senior to all classes or series of Southern Union common stock
                and to all of our equity securities ranking junior to the
                Southern Union preferred stock;

(b)             on a parity with all of the Southern Union's equity securities
                the terms of which specifically provide that the equity
                securities rank on a parity with the Southern Union preferred
                stock; and

(c)             junior to all of Southern Union's equity securities the terms of
                which specifically provide that the equity securities rank
                senior to the Southern Union preferred stock.

                             DESCRIPTION OF WARRANTS

         This section describes the general terms of the warrants that Southern
Union may offer and sell by this prospectus. This prospectus and any
accompanying prospectus supplement will contain the material terms and
conditions for each warrant. The accompanying prospectus supplement may add,
update or change the terms and conditions of the warrants as described in this
prospectus.

General

         Southern Union may issue warrants to purchase debt securities,
preferred stock or common stock. Warrants may be issued independently or
together with any securities and may be attached to or separate from those
securities. The warrants will be issued under warrant agreements to be entered
into between us and a bank or trust company, as warrant agent, all of which will
be described in the prospectus supplement relating to the warrants we are
offering. The warrant agent will act solely as our agent in connection with the
warrants and will not have any obligation or relationship of agency or trust for
or with any holders or beneficial owners of warrants. A copy of the warrant
agreement will be made publicly available in a filing we will make with the SEC
with respect to any offering of warrants.

Debt Warrants

         Southern Union may issue warrants for the purchase of our debt
securities. As explained below, each debt warrant will entitle its holder to
purchase debt securities at an exercise price set forth in, or to be
determinable as set forth in, the related prospectus supplement. Debt warrants
may be issued separately or together with debt securities.

         The debt warrants are to be issued under debt warrant agreements to be
entered into between us and one or more banks or trust companies, as debt
warrant agent, as will be set forth in the prospectus supplement relating to the
debt warrants being offered by the prospectus supplement and this prospectus. A
copy of the debt warrant agreement, including a form of debt warrant certificate
representing the debt warrants, will be made publicly available in a filing we
will make with the SEC with respect to any offering of equity warrants.

         The particular terms of each issue of debt warrants, the debt warrant
agreement relating to the debt warrants and the debt warrant certificates
representing debt warrants will be described in the applicable prospectus
supplement, including, as applicable;

     o    the title of the debt warrants;

     o    the initial offering price;

     o    the title, aggregate principal amount and terms of the debt securities
          purchasable upon exercise of the debt warrants;

     o    the currency or currency units in which the offering price, if any,
          and the exercise price are payable;

     o    the title and terms of any related debt securities with which the debt
          warrants are issued and the number of the debt warrants issued with
          each debt security;

     o    the date, if any, on and after which the debt warrants and the related
          debt securities will be separately transferable;

     o    the principal amount of debt securities purchasable upon exercise of
          each debt warrant and the price at which that principal amount of debt
          securities may be purchased upon exercise of each debt warrant;

     o    if applicable, the minimum or maximum number of warrants that may be
          exercised at any one time;

     o    the date on which the right to exercise the debt warrants will
          commence and the date on which the right will expire;

     o    if applicable, a discussion of United States federal income tax,
          accounting or other considerations applicable to the debt warrants;

     o    whether the debt warrants represented by the debt warrant certificates
          will be issued in registered or bearer form, and, if registered, where
          they may be transferred and registered;

     o    anti-dilution provisions of the debt warrants, if any;

     o    redemption or call provisions, if any, applicable to the debt
          warrants: and

     o    any additional terms of the debt warrants, including terms, procedures
          and limitations relating to the exchange and exercise of the debt
          warrants.

         Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations and, if in registered form, may be
presented for registration of transfer and debt warrants may be exercised at the
corporate trust office of the debt warrant agent or any other office indicated
in the related prospectus supplement. Before the exercise of debt warrants,
holders of debt warrants will not be entitled to payments of principal, premium,
if any, or interest, if any on the debt securities purchasable upon exercise of
the debt warrants, or to enforce any of the covenants in the applicable
indenture.

Equity Warrants

         We may issue warrants for the purchase of our equity securities such as
our preferred stock or common stock. As explained below, each equity warrant
will entitle its holder to purchase equity securities at an exercise price set
forth in, or to be determinable as set forth in, the related prospectus
supplement. Equity warrants may be issued separately or together with equity
securities. The equity warrants are to be issued under equity warrant agreements
to be entered into between us and one or more banks or trust companies, as
equity warrant agent, as will be set forth in the prospectus supplement relating
to the equity warrants being offered by the prospectus supplement and this
prospectus. A copy of the equity warrant agreement, including a form of equity
warrant certificate representing the equity warranty, will be made publicly
available in a filing we will make with the SEC with respect to any offering of
equity warrants.

         The particular terms of each issue of equity warrants, the equity
warrant agreement relating to the equity warrants and the equity warrant
certificates representing equity warrants will be described in the applicable
prospectus supplement, including, as applicable;

     o    the title of the equity warrants;

     o    the initial offering price;

     o    the aggregate number of equity warrants and the aggregate number of
          shares of the equity security purchasable upon exercise of the equity
          warrants;

     o    the currency or currency units in which the offering price, if any,
          and the exercise price are payable;

     o    if applicable, the designation and terms of the equity securities with
          which the equity warrants are issued, and the number of equity
          warrants issued with each equity security;

     o    the date, if any, on and after which the equity warrants and the
          related equity security will be separately transferable;

     o    if applicable, the minimum or maximum number of the warrants that may
          be exercised at any one time;

     o    the date on which the right to exercise the equity warrants will
          commence and the date on which the right will expire;

     o    if applicable, a discussion of United States federal income tax,
          accounting or other considerations applicable to the equity warrants;

     o    anti-dilution provisions of the equity warrants, if any;

     o    redemption or call provisions, if any, applicable to the equity
          warrants: and

     o    any additional terms of the equity warrants, including terms,
          procedures and limitations relating to the exchange and exercise of
          the equity warrants.

         Holders of equity warrants will not be entitled, solely by virtue of
being holders, to vote, to consent, to receive dividends, to receive notice as
shareholders with respect to any meeting of shareholders for the election of
directors or any other matter, or to exercise any rights whatsoever as a holder
of the equity securities purchasable upon exercise of the equity warrants.

                  DESCRIPTION OF SECURITIES PURCHASE CONTRACTS
                          AND SECURITIES PURCHASE UNITS

         This section describes the general terms of the securities purchase
contracts and securities purchase units that Southern Union may offer and sell
by this prospectus. This prospectus and any accompanying prospectus supplement
will contain the material terms and conditions for each warrant. The
accompanying prospectus supplement may add, update or change the terms and
conditions of the securities purchase contracts and securities purchase units as
described in this prospectus.

Stock Purchase Contract and Stock Purchase Units

         Southern Union may issue stock purchase contracts, representing
contracts obligating holders to purchase from us, and obligating us to sell to
the holders, a specified number of shares of common stock or preferred stock at
a future date or dates, or a variable number of shares of common stock or
preferred stock for a stated amount of consideration. The price per share and
the number of shares of common stock or preferred stock may be fixed at the time
the stock purchase contracts are issued or may be determined by reference to a
specific formula set forth in the stock purchase contracts. Any such formula may
include anti-dilution provisions to adjust the number of shares of common stock
or preferred stock issuable pursuant to the stock purchase contracts upon
certain events. The stock purchase contracts may be issued separately or as a
part of units consisting of a stock purchase contract and, as security for the
holder's obligations to purchase the shares under the stock purchase contracts,
either (a) our senior debt securities or subordinated debt securities, (b) our
debt obligations of third parties, including U.S. Treasury securities, or (c)
preferred securities of a trust. The stock purchase contracts may require us to
make periodic payments to the holders of the stock purchase units or vice versa,
and such payments may be unsecured or prefunded on some basis. The stock
purchase contracts may require holders to secure their obligations in a
specified manner and in certain circumstances we may deliver newly issued
prepaid stock purchase contracts upon release to a holder of any collateral
securing such holder's obligations under the original stock purchase contract.
The stock purchase contract will be made publicly available in a filing we will
make with the SEC with respect to any issuance of stock purchase contracts and
stock purchase units.

Debt Purchase Contracts and Debt Purchase Units.

         Southern Union may issue debt purchase contracts, representing
contracts obligating holders to purchase from us, and obligating us to sell to
the holders, a specified principal amount of debt securities at a future date or
dates. The purchase price and the interest rate may be fixed at the time the
debt purchase contracts are issued or may be determined by reference to a
specific formula set forth in the debt purchase contracts.

         The debt purchase contracts may be issued separately or as a part of
units consisting of debt purchase contracts and, as security for the holder's
obligations to purchase the securities under the debt purchase contracts, either
(a) our senior debt securities or subordinated debt securities, (b) our debt
obligations of third parties, including U.S. Treasury securities, or (c)
preferred securities of a trust. The debt purchase contracts may require us to
make periodic payments to the holders of the debt purchase units or vice versa,
and such payments may be unsecured or prefunded on some basis. The debt purchase
contracts may require holders to secure their obligations in a specified manner
and in certain circumstances we may deliver newly issued prepaid debt purchase
contracts upon release to a holder of any collateral securing such holder's
obligations under the original debt purchase contract. The applicable prospectus
supplement will describe the general terms of any purchase contracts or purchase
units and, if applicable, prepaid purchase contracts. The description in the
prospectus supplement will not purport to be complete and will be qualified in
its entirety by reference to (a) the purchase contracts, (b) the collateral
arrangements and depositary arrangements, if applicable, relating to such
purchase contracts or purchase units and (c) if applicable, the prepaid purchase
contracts and the document pursuant to which such prepaid purchase contracts
will be issued, all of which will be made publicly available in a filing we will
make with the SEC with respect to any issuance of debt purchase contracts and
debt purchase units. Material United States federal income tax considerations
applicable to the purchase contracts and the purchase units will also be
discussed in the applicable prospectus supplement.

                        DESCRIPTION OF DEPOSITARY SHARES

         This section describes the general terms of the depositary shares
Southern Union may offer and sell by this prospectus. This prospectus and any
accompanying prospectus supplement will contain the material terms and
conditions for the depositary shares. The accompanying prospectus supplement may
add, update, or change the terms and conditions of the depositary shares as
described in this prospectus.

General

         Southern Union may, at its option, elect to offer depositary shares,
each representing a fraction (to be set forth in the prospectus supplement
relating to a particular series of preferred stock) of a share of a particular
class or series of preferred stock as described below. In the event we elect to
do so, depositary receipts evidencing depositary shares will be issued to the
public. The shares of any class or series of preferred stock represented by
depositary shares will be deposited under a deposit agreement among us, a
depositary selected by us and the holders of the depositary receipts. The
depositary will be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
Subject to the terms of the deposit agreement, each owner of a depositary share
will be entitled, in proportion to the applicable fraction of a share of
preferred stock represented by such depositary share, to all the rights and
preferences of the shares of preferred stock represented by the depositary
share, including dividend, voting, redemption and liquidation rights.

         The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed to
those persons purchasing the fractional shares of the related class or series of
preferred shares in accordance with the terms of the offering described in the
related prospectus supplement.

         Pending the preparation of definitive depositary receipts the
depositary may, upon our written order, issue temporary depositary receipts
substantially identical to, and entitling the holders thereof to all the rights
pertaining to, the definitive depositary receipts but not in definitive form.
Definitive depositary receipts will be prepared without unreasonable delay, and
temporary depositary receipts will be exchangeable for definitive depositary
receipts without charge to the holder.

Dividends and Other Distributions

         The depositary will distribute all cash dividends or other cash
distributions received for the preferred stock to the entitled record holders of
depositary shares in proportion to the number of depositary shares that the
holder owns on the relevant record date, provided, however, that if we or the
depositary is required by law to withhold an amount on account of taxes, then
the amount distributed to the holders of depositary shares shall be reduced
accordingly. The depositary will distribute only an amount that can be
distributed without attributing to any holder of depositary shares a fraction of
one cent. The depositary will add the undistributed balance to and treat it as
part of the next sum received by the depositary for distribution to holders of
the depositary shares.

         If there is a non-cash distribution, the depositary will distribute
property received by it to the entitled record holders of depositary shares, in
proportion, insofar as possible, to the number of depositary shares owned by the
holders, unless the depositary determines, after consultation with us, that it
is not feasible to make such distribution. If this occurs, the depositary may,
with our approval, sell such property and distribute the net proceeds from such
sale to the holders. The deposit agreement also will contain provisions relating
to how any subscription or similar rights that we may offer to holders of the
preferred stock will be available to the holders of the depositary shares.

Withdrawal of Shares

         Upon surrender of the depositary receipts at the corporate trust office
of the depositary unless the related depositary shares have previously been
called for redemption, converted or exchanged into our other securities, the
holder of the depositary shares evidenced thereby is entitled to delivery of the
number of whole shares of the related class or series of preferred stock and any
money or other property represented by such depositary shares. Holders of
depositary receipts will be entitled to receive whole shares of the related
class or series of preferred stock on the basis set forth in the prospectus
supplement for such class or series of preferred stock, but holders of such
whole shares of preferred stock will not thereafter be entitled to exchange them
for depositary shares. If the depositary receipts delivered by the holder
evidence a number of depositary shares in excess of the number of depositary
shares representing the number of whole shares of preferred stock to be
withdrawn, the depositary will deliver to such holder at the same time a new
depositary receipt evidencing such excess number of depositary shares. In no
event will fractional shares of preferred stock be delivered upon surrender of
depositary receipts to the depositary.

Conversion, Exchange and Redemption

         If any class or series of preferred stock underlying the depositary
shares may be converted or exchanged, each record holder of depositary receipts
representing the shares of preferred stock being converted or exchanged will
have the right or obligation to convert or exchange the depositary shares
represented by the depositary receipts.

         Whenever we redeem or convert shares of preferred stock held by the
depositary, the depositary will redeem or convert, at the same time, the number
of depositary shares representing the preferred stock to be redeemed or
converted. The depositary will redeem the depositary shares from the proceeds it
receives from the corresponding redemption of the applicable series of preferred
stock. The depositary will mail notice of redemption or conversion to the record
holders of the depositary shares that are to be redeemed between 30 and 60 days
before the date fixed for redemption or conversion. The redemption price per
depositary share will be equal to the applicable fraction of the redemption
price per share on the applicable class or series of preferred stock. If less
than all the depositary shares are to be redeemed, the depositary will select
which shares are to be redeemed by lot on a pro rata basis or by any other
equitable method as the depositary may decide. After the redemption or
conversion date, the depositary shares called for redemption or conversion will
no longer be outstanding. When the depositary shares are no longer outstanding,
all rights of the holders will end, except the right to receive money,
securities or other property payable upon redemption or conversion.

Voting the Preferred Stock

         When the depositary receives notice of a meeting at which the holders
of the particular class or series of preferred stock are entitled to vote, the
depositary will mail the particulars of the meeting to the record holders of the
depositary shares. Each record holder of depositary shares on the record date
may instruct the depositary on how to vote the shares of preferred stock
underlying the holder's depositary shares. The depositary will try, if
practical, to vote the number of shares of preferred stock underlying the
depositary shares according to the instructions. We will agree to take all
reasonable action requested by the depositary to enable it to vote as
instructed.

Amendment and Termination of the Deposit Agreement

         Southern Union and the depositary may agree at any time to amend the
deposit agreement and the depositary receipt evidencing the depositary shares.
Any amendment that (a) imposes or increases certain fees, taxes or other charges
payable by the holders of the depositary shares as described in the deposit
agreement or (b) otherwise materially adversely affects any substantial existing
rights of holders of depositary shares, will not take effect until such
amendment is approved by the holders of at least a majority of the depositary
shares then outstanding. Any holder of depositary shares that continue to hold
its shares after such amendment has become effective will be deemed to have
agreed to the amendment.

         Southern Union may direct the depositary to terminate the deposit
agreement by mailing a notice of termination of holders of depositary shares at
least 30 days prior to termination. The depositary may terminate the deposit
agreement if 90 days have elapsed after the depositary delivered written notice
of its election to resign and a successor depositary is not appointed. In
addition, the deposit agreement will automatically terminate if:

     o    the depositary has redeemed all related outstanding depositary shares;

     o    all outstanding shares of preferred stock have been converted into or
          exchanged for common stock; or

     o    we have liquidated, terminated or wound up our business and the
          depositary has distributed the preferred stock of the relevant series
          to the holders of the related depositary shares.

Reports and Obligations

         The depositary will forward to the holders of depositary shares all
reports and communications from us that are delivered to the depositary and that
we are required by law, the rules of an applicable securities exchange or our
amended and restated certificate of incorporation to furnish to the holders of
the preferred stock. Neither we nor the depositary will be liable if the
depositary is prevented or delayed by law or any circumstances beyond its
control in performing its obligations under the deposit agreement. The deposit
agreement limits our obligations to performance in good faith of the duties
stated in the deposit agreement. The depositary assumes no obligation and will
not be subject to liability under the deposit agreement except to perform such
obligations as are set forth in the deposit agreement without negligence or bad
faith. Neither we nor the depositary will be obligated to prosecute or defend
any legal proceeding connected with any depositary shares or class or series of
preferred stock unless the holders of depositary shares requesting us to do so
furnish us with a satisfactory indemnity. In performing our obligations, we and
the depositary may rely and act upon the advice of our counsel or accountants,
on any information provided to us by a person presenting shares for deposit, any
holder of a receipt, or any other document believed by us or the depositary to
be genuine and to have been signed or presented by the proper party or parties.

Payment of Fees and Expenses

         We will pay all fees, charges and expenses of the depositary, including
the initial deposit of the preferred stock and any redemption of the preferred
stock. Holders of depositary shares will pay taxes and governmental charges and
any other charges as are stated in the deposit agreement for their accounts.

Resignation and Removal of Depositary

         At any time, the depositary may resign by delivering notice to us, and
we may remove the depositary at any time. Resignations or removals will take
effect upon the appointment of a successor depositary and its acceptance of the
appointment. The successor depositary must be appointed within 90 days after the
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.

                    DESCRIPTION OF TRUST PREFERRED SECURITIES

         The following is a summary of the material terms and provisions of the
trust preferred securities and the trust agreements. It summarizes only those
portions of the trust preferred securities and the trust agreements which we
believe will be most important in your decision to invest in the trust preferred
securities. You should keep in mind, however, that it is the trust agreements,
and not this summary, that define your rights. There may be other provisions in
the trust agreements which are also important to you. You should read the trust
agreements themselves for a full description of their terms. A form of each
trust agreement is filed as an exhibit to the registration statement that
includes this prospectus. See "Where You Can Find More Information" for
information on how to obtain a copy of the form of each trust agreement.

         Each trust may issue one series of trust preferred securities having
terms described in the prospectus supplement for that series. The trust
agreement of each trust authorizes the establishment of no more than one series
of trust preferred securities, which will represent undivided beneficial
interests in the assets of the trust. The terms of the trust preferred
securities, including distribution, redemption, voting and liquidation rights
and any other preferred, deferred or other special rights or restrictions, will
be described in the trust agreement or made part of the trust agreement by the
Trust Indenture Act. The prospectus supplement for each specific series of trust
preferred securities will state the terms for the trust preferred securities of
that series, including:

     o    the distinctive designation of the trust preferred securities;

     o    the number of trust preferred securities to be issued;

     o    the annual distribution rate (or method of determining such rate) and
          the date or dates upon which such distributions will be payable;

     o    whether distributions on the trust preferred securities will be
          cumulative, and, if so, the date or dates or method of determining the
          date or dates from which distributions on trust preferred securities
          will be cumulative;

     o    the amount or amounts which will be paid out of the assets of the
          trust to the holders of the trust preferred securities upon voluntary
          or involuntary dissolution, winding-up or termination of the trust;

     o    the obligation, if any, of the trust to purchase or redeem the trust
          preferred securities following an exercise by Southern Union of an
          option under the corresponding subordinated debt securities, and the
          terms and conditions of such purchases or redemptions;

     o    the period or periods, if any, within which the terms and conditions,
          including the price or prices or the rate or rates of conversion or
          exchange and the terms and conditions of any adjustments, upon which
          the trust preferred securities shall be convertible or exchangeable at
          the option of the holder thereof into other property or cash;

     o    the voting rights, if any, of the trust preferred securities in
          addition to those required by law, including the number of votes per
          trust preferred security and any requirement for the approval by the
          holders of the trust preferred securities for specified actions or
          amendments to the trust agreement;

     o    the additional payments, if any, which the trust will pay as a
          distribution as necessary so that the net amounts reserved by the
          trust and distributable to the holders of the trust preferred
          securities, after all taxes, duties, assessments or governmental
          charges of whatever nature have been paid will not be less than the
          amount that would have been reserved and distributed by the trust, and
          the amount the holders of the trust preferred securities would have
          reserved, had no such taxes, duties assessments or governmental
          charges been imposed;

     o    the terms and conditions, if any, upon which the subordinated debt
          securities held by the trust may be distributed to the holders of the
          trust preferred securities; and

     o    any other relevant rights, powers, preferences, privileges,
          limitations or restrictions of the trust preferred securities
          consistent with the trust agreement and applicable law.

         All trust preferred securities offered by this prospectus will be
guaranteed by Southern Union on a subordinated basis and to the extent described
under "Description of the Trust Guarantees." Certain United States federal
income tax considerations applicable to any offering of the trust preferred
securities will be described in the prospectus supplement relating thereto.

         In connection with the issuance of trust preferred securities by a
trust, that trust will issue one series of common securities having such terms,
including distribution, redemption, voting and liquidation rights and such other
preferred, deferred or other rights or restrictions as will be described in the
trust agreement. Except as described below, the terms of the common securities
issued by a trust will be substantially identical to the terms of the trust
preferred securities issued by that trust. The common securities will rank
equally with, and payments will be made on the common securities pro rata with,
the related trust preferred securities except that, upon an event of default
under the trust agreement, the rights of the holders of the common securities to
payments in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the trust
preferred securities. Except in certain limited circumstances, the common
securities will have the right to vote and the right to appoint, remove or
replace any of the trustees of the related trust. All common securities will be
directly or indirectly owned by Southern Union.

Effect of Obligations Under the Subordinated Debt Securities and the Guarantees

         The purpose of each trust is to issue the common securities and the
trust preferred securities and to use the proceeds from such issuance to acquire
subordinated debt securities from Southern Union.

         As long as payments of interest and other payments on the subordinated
debt securities are made when due, such payments will be sufficient to cover
distributions and payments due on the common securities and the trust preferred
securities because of the following factors:

     o    the total principal amount of the subordinated debt securities will be
          equal to the sums of the total stated liquidation amount of the common
          securities and the trust preferred securities;

     o    the interest rate and the interest and other payment dates on the
          subordinated debt securities will match the distribution rate and
          distribution and other payment dates for the common securities and the
          trust preferred securities;

     o    Southern Union will pay all, and no trust shall be obligated to pay
          any, of the trusts' costs, expenses, debts and liabilities (other than
          with respect to the common securities and the trust preferred
          securities); and

     o    the trustees may not take or cause or permit the trust to, among other
          things, engage in any activity that is not consistent with the
          purposes of the trust.

         Payments of distributions and other payments due on the trust preferred
securities (to the extent funds for distributions and other payments are
available to the trust) are guaranteed by Southern Union as and to the extent
discussed under "Description of the Trust Guarantees" below. If Southern Union
does not make interest payments on the subordinated debt securities purchased by
a trust, it is expected that that trust will not have sufficient funds to pay
distributions on the trust preferred securities. The Southern Union guarantees,
which are for the purpose of ensuring that each trust performs its obligations
to pay distributions on the trust preferred securities, do not apply to any
payment of distributions unless and until the trusts have sufficient funds for
the payment of distributions and other payments on the trust preferred
securities. Each trust will have sufficient funds only if and to the extent that
Southern Union has made a payment of interest or principal on the subordinated
debt securities held by the trust as its sole asset. The Southern Union
guarantee for a trust, when taken together with Southern Union's obligations
under the subordinated debt securities held by that trust and the related
indenture, and Southern Union's obligations under the applicable trust
agreement, including its obligations to pay costs, expenses, debts and
liabilities of the trust (other than with respect to the common securities and
the trust preferred securities), provides a full and unconditional guarantee of
amounts due on the trust preferred securities issued by that trust.

         If Southern Union fails to make interest or other payments on the
subordinated debt securities issued by a trust when due (taking account of any
extension period), the applicable trust agreement provides a mechanism whereby
the holders of the trust preferred securities may direct the property trustee to
enforce its rights under the subordinated debt securities held by the trust. If
a property trustee fails to enforce its rights under the subordinated debt
securities, a holder of related trust preferred securities may, to the fullest
extent permitted by applicable law, institute a legal proceeding against
Southern Union to enforce the property trustee's rights under the subordinated
debt securities without first instituting any legal proceeding against the
property trustee or any other person or entity. Notwithstanding the foregoing,
if an event of default has occurred and is continuing under a trust agreement,
and such event is attributable to the failure of Southern Union to pay interest
or principal on the related subordinated debt securities on the date such
interest or principal is otherwise payable (or, in the case of redemption, on
the redemption date), then a holder of the related trust preferred securities
may institute legal proceedings directly against Southern Union to obtain
payment. If Southern Union fails to make payments under any guarantee, that
guarantee provides a mechanism whereby the holders of the related trust
preferred securities may direct the guarantee trustee to enforce its rights
thereunder. Any holder of trust preferred securities may institute a legal
proceeding directly against Southern Union to enforce the guarantee trustee's
rights under a related guarantee without first instituting a legal proceeding
against the trust, the guarantee trustee or any other person or entity.

                       DESCRIPTION OF THE TRUST GUARANTEES

         At the same time as a trust issues trust preferred securities, Southern
Union will execute and deliver a trust guarantee for the benefit of the holders
of the trust preferred securities. Each trust guarantee will be qualified as an
indenture under the Trust Indenture Act. Wilmington Trust Company will act as
the indenture trustee, or guarantee trustee, under the trust guarantee.

         The following is a summary of the material terms and provisions of the
trust guarantees. It summarizes only those portions of the trust guarantees
which we believe will be most important to your decision to invest in the trust
preferred securities. You should keep in mind, however, that it is the trust
guarantees, and not this summary, which define your rights. There may be other
provisions in the trust guarantees which are also important to you. You should
read the trust guarantees themselves for a full description of their terms. A
form of the trust guarantees is filed as an exhibit to the registration
statement that includes this prospectus. See "Where You Can Find More
Information" for information on how to obtain a copy of the form of the trust
guarantees.

General

         Under each trust guarantee, Southern Union will irrevocably and
unconditionally agree, to the extent set forth therein, to pay the trust
guarantee payments described below to the holders of the related trust preferred
securities in the event they are not paid by or on behalf of the trust when due,
regardless of any defense, right of set-off or counterclaim which the trust may
have or assert other than the defense of payment.

         The following payments (referred to as trust guarantee payments) to the
extent not paid by the related trust when due, will be subject to the related
trust guarantee:

     o    any accumulated and unpaid distributions required to be paid on the
          trust preferred securities, to the extent that the trust has funds
          available for payment at that time;

     o    the redemption price of any trust preferred securities called for
          redemption, to the extent that the trust has funds available for
          payment at that time; and

     o    upon voluntary or involuntary dissolution, winding-up or termination
          of the trust (other than in connection with the distribution of the
          subordinated debt securities to the holders of trust preferred
          securities or the redemption of all trust preferred securities), the
          lesser of: the aggregate of the liquidation amount and all accrued and
          unpaid distributions on the trust preferred securities, to the extent
          that the trust has funds available for payment at that time; and the
          amount of assets of the trust remaining available for distribution to
          holders of its trust preferred securities.

         Southern Union's obligation to make a trust guarantee payment will be
satisfied by direct payment of the required amounts to the holders of the trust
preferred securities or by causing the trust to pay the required amounts to the
holders.

         Each trust guarantee will be a full, unconditional and irrevocable
guarantee on a subordinated basis of the trust's obligations under the trust
preferred securities, but will apply only to the extent that the trust has funds
sufficient to make these payments. If Southern Union does not make interest
payments on the subordinated debt securities purchased by a trust, that trust
will not be able to pay distributions on the trust preferred securities issued
by it and will not have funds available for such payment.

         Southern Union will, for each trust, through the trust guarantee, the
trust agreement, the subordinated debt securities and the indenture, taken
together, fully, irrevocably and unconditionally guarantee all of the trust's
obligations under the trust preferred securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
will constitute such guarantee. It is only the combined operation of these
documents that will have the effect of providing a full, irrevocable and
unconditional guarantee of the trust's obligations under the trust preferred
securities.

         Southern Union has also agreed separately to irrevocably and
unconditionally guarantee the obligations of the trusts with respect to the
common securities to the same extent as the trust guarantees, except that upon
the occurrence and during the continuation of an event of default under the
trust agreement, holders of trust preferred securities will have priority over
holders of common securities with respect to distributions and payments on
liquidation, redemption or otherwise.

Certain Covenants of Southern Union

         In each trust guarantee, Southern Union will covenant that it will not,
if (1) there shall have occurred any event of which Southern Union has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would constitute an event of default under the related indenture and (b) in
respect of which Southern Union shall not have taken reasonable steps to cure,
(2) Southern Union shall be in default with respect to its payment of any
obligations under the trust guarantee, or (3) Southern Union shall have given
notice of its selection of an extension period as provided in the related
indenture and shall not have rescinded such notice, or such extension period, or
any extension thereof, shall be continuing:

     o    declare or pay any dividends or distributions on, or redeem, purchase,
          acquire, or make a liquidation payment with respect to, any of
          Southern Union's capital stock or capital stock of any of its
          subsidiaries that are not wholly-owned (other than any stock dividend
          paid by Southern Union or any of its subsidiaries where the dividend
          stock is of the same type as that on which the dividend is being
          paid); or

     o    make any payment of principal, interest or premium, if any, on or
          repay or repurchase or redeem any debt securities (including
          guarantees of indebtedness for money borrowed) of Southern Union that
          rank equal or junior to the subordinated debt securities (other than
          (a) any dividend, redemption, liquidation, interest, principal or
          guarantee payment by Southern Union where the payment is made by way
          of securities (including capital stock) that rank equal with or junior
          to the securities on which such dividend, redemption, interest,
          principal or guarantee payment is being made, (b) payments under the
          trust guarantees, (c) as a result of a reclassification of Southern
          Union's capital stock or the exchange or conversion of one series or
          class of Southern Union's capital stock for another series or class of
          Southern Union's capital stock, and (d) the purchase of fractional
          interest in shares of Southern Union's capital stock pursuant to the
          conversion or exchange provisions of such capital stock or the
          security being converted or exchanged).

Modification of the Trust Guarantees; Assignment

         Except with respect to any changes which do not materially adversely
affect the rights of holders of trust preferred securities, in which case no
vote will be required, no trust guarantee may be amended without the prior
approval of the holders of not less than 66% in liquidation amount of the
related outstanding trust preferred securities. The manner of obtaining this
approval of holders of the trust preferred securities will be described in an
accompanying prospectus supplement. All guarantees and agreements contained in a
trust guarantee will bind the successors, assigns, receivers, trustees and
representatives of Southern Union and will inure to the benefit of the holders
of the trust preferred securities then outstanding.

Events of Default

         An event of default under a trust guarantee will occur upon Southern
Union's failure to perform any of its payment or other obligations thereunder.
The holders of a majority in liquidation amount of the trust preferred
securities to which the trust guarantee relates have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the guarantee trustee in respect of the guarantee or to direct the exercise of
any trust or power conferred upon the guarantee trustee under the trust
guarantee.

         If the guarantee trustee fails to enforce the trust guarantee, any
holder of the related trust preferred securities may institute a legal
proceeding directly against Southern Union to enforce the guarantee trustee's
rights under the trust guarantee, without first instituting a legal proceeding
against the relevant trust, the guarantee trustee or any other person or entity.
In addition, any holder of trust preferred securities shall have the right,
which is absolute and unconditional, to proceed directly against Southern Union
to obtain guarantee payments, without first waiting to determine if the
guarantee trustee has enforced a guarantee or instituted a legal proceeding
against the trust, the guarantee trustee or any other person or entity. Southern
Union has waived any right or remedy to require that any action be brought just
against the trust, the guarantee trustee or any other person or entity before
proceeding directly against Southern Union.

         Southern Union will be required to provide annually to the guarantee
trustee a statement as to the performance by it of certain of its obligations
under each of the trust guarantees and as to any default in such performance.
Southern Union will be required to file annually with the guarantee trustee an
officer's certificate as to its compliance with all conditions under each of the
trust guarantees.

Termination

         Each trust guarantee will terminate and be of no further force and
effect upon the first to occur of:

     o    full payment of the redemption price of all related trust preferred
          securities;

     o    distribution of the subordinated debt securities to the holders of the
          related trust preferred securities in exchange for all the related
          trust preferred securities; or

     o    full payment of the amounts payable upon liquidation of the related
          trust.

         Each trust guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of trust preferred
securities must restore payment of any sums paid under the trust preferred
securities or the trust guarantee.

Status of the Trust Guarantees

         The trust guarantees will constitute unsecured obligations of Southern
Union and will rank:

     o    subordinate and junior in right of payment to all senior indebtedness
          of Southern Union in the same manner as the subordinated debt
          securities (See "Description of the Subordinated Debt
          Securities--Subordination"); and

     o    equally with the related subordinated debt securities and any other
          subordinated debt securities and related trust guarantees now or
          hereafter issued by Southern Union.

         The terms of the trust preferred securities provide that each holder
thereof, by acceptance of the trust preferred securities, agrees to the
subordination provisions and other terms of the related trust guarantee.

         The trust guarantees will constitute a guarantee of payment and not of
collection. Accordingly, the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under the trust guarantee
without first instituting a legal proceeding against any other person or entity.
The guarantees will be held for the benefit of the holders of the trust
preferred securities. The guarantees will not be discharged except by payment of
the guarantee payments in full to the extent not paid by the related trust or
upon distribution of the subordinated debt securities to the holders of the
trust preferred securities. The guarantees do not place a limitation on the
amount of additional indebtedness that may be incurred by Southern Union.

Information Concerning the Guarantee Trustee

         Prior to the occurrence of a default with respect to a trust guarantee
and after the curing or waiving of all events of default with respect to that
trust guarantee, the guarantee trustee undertakes to perform only those duties
as are specifically set forth in that trust guarantee. In case an event of
default has occurred and has not been cured or waived, the guarantee trustee
will exercise the same degree of care and skill as a prudent individual would
exercise or use in the conduct of his or her own affairs. Subject to these
provisions, the guarantee trustee is under no obligation to exercise any of the
powers vested in it by a trust guarantee at the request of any holder of trust
preferred securities, unless it is offered reasonable indemnity against the
costs, expenses and liabilities which might be incurred through the exercise of
those powers.

         Southern Union and certain of its affiliates may, from time to time,
maintain a banking relationship with the guarantee trustee.

Governing Law

         The trust guarantees will be governed by, and interpreted in accordance
with, the laws of the State of New York.

                   DESCRIPTION OF SUBORDINATED DEBT SECURITIES

General Summary

         Following issuance of trust preferred securities by a trust, the trust
will use the proceeds of such issuance to purchase subordinated debt securities
from Southern Union. The subordinated debt securities may be issued in one or
more series. Only one series of subordinated debt securities will be issued to a
particular trust, or the property trustee of such trust. That trust will hold
all of the subordinated debt securities of that series.

         Each series of subordinated debt securities will be issued under the
Subordinated Debt Securities Indenture, dated as of May 10, 1995, between
Southern Union and JP Morgan Chase Bank, as the subordinated debt securities
trustee, as supplemented by a supplemental indenture for such series. The
subordinated debt securities indenture, as so supplemented, will be called the
"indenture."

         The following is a summary of the material terms and provisions of the
subordinated debt securities and the indenture. It summarizes only those
portions of the subordinated debt securities and indenture which we believe will
be most important to your decision to invest in the trust preferred securities.
You should keep in mind, however, that it is the indenture, and not this
summary, that defines your rights. There may be other provisions in the
indenture which are also important to you. You should read the indenture itself
for a full description of its terms. Both the indenture and a form of the
supplemental indenture will be made publicly available in a filing we make with
the SEC with respect to any offering we make of subordinated debt securities.
See "Where You Can Find More Information" for information on how to obtain a
copy of the form of the indenture and form of supplemental indenture.

         Each series of subordinated debt securities will be direct, unsecured
obligations of Southern Union. The subordinated debt securities will have a
junior position to all of Southern Union's senior debt securities.

         The subordinated debt securities are issued to a trust or the property
trustee of such trust in connection with the issuance of trust securities by
such trust, such subordinated debt securities may be distributed pro rata to the
holders of such trust securities in connection with the dissolution of such
trust upon the occurrence of certain events described in the prospectus
supplement relating to such trust preferred securities.

         The prospectus supplement with respect to the issuance of trust
preferred securities will include a description of the specific terms of the
subordinated debt securities issued to the trust. These terms will include some
or all of the following:

     o    the title and type of the subordinated debt securities;

     o    the total principal amount and the currency, if other than U.S.
          dollars, in which such subordinated debt securities are denominated;

     o    the percentage of the principal amount at which the subordinated debt
          securities will be issued and any payments due if the maturity is
          accelerated;

     o    the date on which the principal will be payable and the terms on which
          any such maturity date may be extended;

     o the interest rate and the interest payment dates;

     o    any optional redemption provisions;

     o    any sinking fund or other provisions that would obligate Southern
          Union to repurchase or otherwise redeem some or all of the
          subordinated debt securities;

     o    any changes to or additional events of default or covenants;

     o    any special tax implications of the subordinated debt securities,
          including provisions for original issue discount securities, if
          offered;

     o    restrictions on the declaration of dividends on Southern Union's
          capital stock (other than dividends in such stock) or requiring the
          maintenance of any asset ratio or the creation or maintenance of
          reserves; and

     o    the rights, if any, to defer payments of interest on the subordinated
          debt securities by extending the interest payment period, and the
          duration of such extensions;

     o    the subordination terms of the subordinated debt securities of such
          series;

     o    any deletions from, modifications of or additions to the events of
          default or covenants with respect to such subordinated debt
          securities, whether or not such events of default or covenants are
          consistent with the events of default or covenants described in this
          prospectus; and

     o    any other terms of such subordinated debt securities.

         For a description of the terms of any series of the subordinated debt
securities, you should refer to the applicable prospectus supplement.

         The indenture does not limit the aggregate principal amount of
subordinated debt securities that Southern Union may issue pursuant to that
indenture. The indenture does not contain any provisions that would limit
Southern Union's ability to incur debt. The indenture does not contain any
provisions that protect the holders of the subordinated debt securities in the
event that Southern Union engages in a highly leveraged transaction or other
transaction in connection with a takeover attempt. Such a transaction could
result in a decline in the credit rating of the subordinated debt securities.

         Under the indenture, Southern Union has the ability to issue debt
securities with terms different from any debt securities it has already issued,
without the consent of the holders of any previously issued series of
subordinated debt securities.

Denominations

         Subordinated debt securities issued to a trust will be issued as
registered securities in denominations and integrals thereof, as will be set
forth in the applicable prospectus supplement.

Subordination

         The subordinated debt securities will be subordinated and junior in
right of payment to the following indebtedness of Southern Union, whether
outstanding on the date of execution of the subordinated debt indenture or
thereafter incurred, created or assumed:

     o    indebtedness of Southern Union for money borrowed by Southern Union or
          evidenced by securities, debentures (other than the subordinated debt
          securities), bonds or similar instruments issued by Southern Union,
          including any of Southern Union's mortgage bonds;

     o    capital lease obligations of Southern Union;

     o    obligations of Southern Union incurred for deferring the purchase
          price of property, with respect to conditional sales, or under any
          title retention agreement (but excluding trade accounts payable
          arising in the ordinary course of business);

     o    obligations of Southern Union with respect to letters of credit,
          banker's acceptances, security purchase facilities or similar credit
          transitions; and

     o    all indebtedness of others of the type referred to in the four
          preceding clauses assumed by or guaranteed in any manner by Southern
          Union or in effect guaranteed by Southern Union.

Covenants

         Under the subordinated indenture, Southern Union will:

     o    pay the principal of, and interest and any premium on, the
          subordinated debt securities when due;

     o    maintain a place of payment;

     o    deliver a report to the subordinated debt securities trustee at the
          end of each fiscal year reviewing its obligations under the indenture;
          and

     o    deposit sufficient funds with any paying agent on or before the due
          date for any principal, interest or premium.

         For as long as any trust preferred securities are outstanding of either
trust that holds, directly or indirectly through a property trustee of such
trust, any subordinated debt securities, Southern Union will:

     o    directly or indirectly maintain 100% ownership of the common
          securities of such trust; provided, however, that certain successors
          that are permitted under the indenture may succeed to Southern Union's
          ownership of such common securities;

     o    cause such trust to remain a statutory business trust, except in
          connection with the distribution of subordinated debt securities to
          the holders of trust preferred securities in liquidation of such
          trust, the redemption of all of the trust preferred securities of the
          trust, or certain mergers, consolidations or amalgamations, each as
          permitted by the trust agreement; and

     o    use its reasonable efforts to cause such trust to continue to be
          classified as a grantor trust for United States federal income tax
          purposes.

Consolidations, Mergers and Sales

         The subordinated indenture provides that Southern Union will not
consolidate with or merge with or into any other entity, or convey, transfer or
lease, or permit one or more of its subsidiaries to convey, transfer or lease,
all or substantially all of their properties and assets on a consolidated basis
to any other entity, unless Southern Union is the surviving corporation or:

     o    such other entity assumes by supplemental indenture all of Southern
          Union's obligations under the indenture and the subordinated debt
          securities;

     o    no default or event of default is existing immediately after the
          transaction;

     o    the surviving entity is a corporation, partnership or trust organized
          and validly existing under the laws of the United States of America,
          any state of the United States of America or the District of Columbia;
          and

     o    certain other conditions are met.

Liens

         Pursuant to the indenture, Southern Union will not, and will not permit
any of its subsidiaries to, create, incur, issue or assume any debt secured by
any lien on any property or assets owned by Southern Union or any of its
subsidiaries, and Southern Union will not, and will not permit any of its
subsidiaries to, create, incur, issue or assume any debt secured by any lien on
any shares of stock or debt of any subsidiary (such shares of stock or debt of
any subsidiary being called "restricted securities"), unless

     o    in the case of new debt which is expressly by its terms subordinate or
          junior in right of payment to the subordinated debt securities, the
          subordinated debt securities are secured by a lien on such property or
          assets that is senior to the new lien with the same relative priority
          as such subordinated debt has with respect to the subordinated debt
          securities; or

     o    in the case of liens securing new debt that is ranked equally with the
          subordinated debt securities, the subordinated debt securities are
          secured by a lien on such property or assets that is equal and ratable
          with the new lien, except that any lien securing such subordinated
          debt securities may be junior to any lien on Southern Union's accounts
          receivable, inventory and related contract rights securing debt under
          Southern Union's revolving credit facility.

These restrictions do not prohibit Southern Union from creating any of the
following liens:

     (1)  any liens on any of our property, assets or restricted securities or
          those of any subsidiary existing as of the date of the first issuance
          by us of the debt securities issued pursuant to the indenture, or such
          other date as may be specified in a prospectus supplement for an
          applicable series of debt securities issued pursuant to the indenture,
          subject to the provisions of subsection (8) below;

     (2)  liens on any property or assets or restricted securities of any
          corporation existing at the time such corporation becomes a
          subsidiary, or arising after such time (a) otherwise than in
          connection with the borrowing of money arranged after the corporation
          became a subsidiary and (b) pursuant to contractual commitments
          entered into prior to and not in contemplation of such corporation
          becoming a subsidiary;

     (3)  liens on any of our property, assets or restricted securities or those
          of any subsidiary existing at the time of acquisition of such
          property, assets or securing the payment of all or any part of the
          purchase price or construction cost of such property, assets or
          restricted securities, or securing any debt incurred prior to, at the
          time of or within 120 days after the later of the date of the
          acquisition of such property, assets or restricted securities or the
          completion of any such construction, for the purpose of financing all
          or any part of the purchase price or construction cost;

     (4)  liens on any property or assets to secure all or any part of the cost
          of development, operation, construction, alteration, repair or
          improvement of all or any part of such property or assets or to secure
          debt incurred by us or any of our subsidiaries prior to, at the time
          of or within 120 days after, the completion of such development,
          operation, construction, alteration, repair or improvement, whichever
          is later, for the purpose of financing all or any related costs;

     (5)  liens in favor of the trustee for the benefit of the holders and
          subsequent holders of the debt securities securing the debt
          securities;

     (6)  liens secured by any of our property or assets or those of any
          subsidiary that comprise no more than 20% of Consolidated Net Tangible
          Assets (as defined under "Terms Described in the Indenture" below);

     (7)  liens which secure senior indebtedness owing by a subsidiary to us or
          to another subsidiary; and

     (8)  any extension, renewal, substitution or replacement in whole or in
          part, of any of the liens referred to above or the debt secured by the
          liens; provided that:

     (a)  such extension, renewal, substitution or replacement lien will be
          limited to all or any part of the same property, assets or restricted
          securities that secured the prior lien plus improvements on such
          property and plus any other property or assets not then owned by us or
          one of our subsidiaries or constituting restricted securities; and

     (b)  in the case of items (1) through (3) above, the debt secured by such
          lien at such time is not increased.

         If Southern Union gives a guarantee that is secured by a lien on any
property or assets or restricted securities, or creates a lien on any property
or assets or restricted securities to secure debt that existed prior to the
creation of such lien, the indenture will deem that Southern Union has created
debt in an amount equal to the principal amount guaranteed or secured by such
lien. The amount of debt secured by liens on property, assets and restricted
securities will be computed without cumulating the indebtedness with any
guarantee or lien securing the same indebtedness.

Election to Defer Payments of Interest

         Southern Union has the right, at any time during the term of
subordinated debt securities, to defer payment of interest by extending the
interest payment period of the subordinated debt securities for up to 20
consecutive quarters. If Southern Union has given notice of its election to
defer payments or interest on subordinated debt securities issued to a trust or
a related subordinated debt securities trustee by extending the interest payment
period as provided in the indenture, then:

o              Southern Union will not, and will cause any subsidiary that is
               not its wholly-owned subsidiary not to, declare or pay dividends
               on, or make a distribution with respect to or redeem, purchase or
               acquire, or make a liquidation payment with respect to, any of
               Southern Union's capital stock or the capital stock of any such
               subsidiary; and

o              Southern Union will not make any payment of interest, principal
               or premium, on or repay, repurchase or redeem any subordinated
               debt securities issued by Southern Union that rank equally with
               or junior to such subordinated debt securities.

The restriction in paragraph (1) above does not apply to any stock dividends
paid by Southern Union, or any of its subsidiaries, where the dividend stock is
the same as the stock on which the dividend is being paid.

Events of Default

         The subordinated indenture provides that any one of the following
events is an event of default:

     o    failure to pay any interest due on any subordinated debt security for
          10 days;

     o    failure to pay the principal of, or any premium on, any subordinated
          debt security when due, whether at maturity, by acceleration, upon
          redemption, by declaration or otherwise;

     o    failure to perform any other covenant or agreement in the indenture,
          which continues for 60 days after written notice is given to Southern
          Union by the subordinated debt securities trustee or the holders of at
          least 25% of the outstanding subordinated debt securities of that
          series;

     o    failure to pay principal of, or premium on, any indebtedness of
          Southern Union or any of its subsidiaries in excess of 10% of Southern
          Union's consolidated net worth (the sum of stockholder's equity,
          preferred stock and minority interests), provided that (i) the
          indebtedness has already become due and payable at its stated maturity
          or (ii) the failure results in the acceleration of the maturity of the
          indebtedness;

     o    the voluntary or involuntary dissolution, winding-up or termination of
          the applicable trust, except in connection with the distribution of
          the related subordinated debt securities to the holders of the common
          securities and the trust preferred securities in liquidation or
          redemption of the common securities and trust preferred securities,
          the redemption of all of the related trust preferred securities or
          certain mergers, consolidations or amalgamations permitted by the
          trust agreement;

     o    certain events in any bankruptcy, insolvency or reorganization of
          Southern Union or its assets; or

     o    any other event of default listed in the supplemental indenture for a
          series of subordinated debt securities.

         Southern Union is required to file annually with the subordinated debt
securities trustee an officer's certificate as to its compliance with all
conditions and covenants under the indenture. The indenture permits the
subordinated debt securities trustee to withhold notice to the holders of
subordinated debt securities of any default, except in the case of a failure to
pay the principal of (or premium, if any), or interest on, such subordinated
debt securities if the subordinated debt securities trustee considers it in the
interest of the holders of subordinated debt securities to do so.

         If an event of default, other than certain events with respect to
Southern Union's bankruptcy, insolvency and reorganization, or the dissolution,
winding-up or termination of the applicable trust, occurs and is continuing with
respect to the subordinated debt securities, the subordinated debt securities
trustee or the holders of at least 25% in principal amount of the outstanding
subordinated debt securities of that series may declare the outstanding
subordinated debt securities of that series due and payable immediately. If
Southern Union's bankruptcy, insolvency or reorganization, or the dissolution,
winding-up or termination of the applicable trust, causes an event of default
for subordinated debt securities of a particular series, then the principal of
all the outstanding subordinated debt securities of that series, and accrued and
unpaid interest thereon, will automatically be due and payable without any act
on the part of the subordinated debt securities trustee or any holder.

         If an event of default with respect to a particular series of
subordinated debt securities occurs and is continuing, the subordinated debt
securities trustee will be under no obligation to exercise any of its rights or
powers under the subordinated debt securities indenture at the request or
direction of any of the holders of subordinated debt securities of such series
(other than certain duties listed in the indenture), unless such holders offer
to the subordinated debt securities trustee reasonable indemnity and security
against the costs, expenses and liabilities that might be incurred by the
subordinated debt securities trustee to comply with the holders' request. If
they provide this indemnity to the subordinated debt securities trustee, the
holders of a majority in principal amount of the outstanding subordinated debt
securities of such series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the subordinated
debt securities trustee under the indenture, or exercising any trust or power
given to the subordinated debt securities trustee with respect to the
subordinated debt securities of that series. The subordinated debt securities
trustee may refuse to follow directions in conflict with law or the indenture
that may subject the subordinated debt securities trustee to personal liability
or may be unduly prejudicial to holders not joining in such directions.

         The holders of not less than a majority in principal amount of any
series of the outstanding subordinated debt securities may, on behalf of the
holders of all the subordinated debt securities of such series waive any past
default under indenture with respect to such series and its consequences (other
than defaults resulting from Southern Union's bankruptcy, insolvency or
reorganization, or the dissolution, winding-up or termination of the applicable
trust, which may be waived by the holders of not less than a majority in
principal amount of all securities outstanding under the indenture), except a
default:

o              in the payment of the principal of (or premium, if any) or
               interest on any subordinated debt security of any series unless
               such default has been cured and a sum sufficient to pay all
               matured installments of interest and principal due otherwise than
               by acceleration and any subordinated debt securities premium has
               been deposited with the subordinated debt securities trustee; or

o              in respect of a covenant or provision that cannot be modified or
               amended without the consent of the holder of each outstanding
               subordinated debt security of such series affected by the
               modification or amendment.

Modification or Waiver

         Southern Union and the subordinated debt securities trustee may modify
and amend the indenture with the consent of the holders of not less than a
majority in principal amount of all outstanding subordinated debt securities or
any series of subordinated debt securities that is affected by such modification
or amendment. The consent of the holder of each outstanding subordinated debt
security of a series is required in order to:

     o    change the stated maturity of the principal of (or premium, if any),
          or any installment of principal or interest on any subordinated debt
          security of such series;

     o    reduce the principal amount or the rate of interest on or any
          additional amounts payable, or any premium payable upon the redemption
          of such series;

     o    change Southern Union's obligation to pay additional amounts in
          respect of any subordinated debt security of such series;

     o    reduce the amount of principal of a subordinated debt security that is
          an original issue discount security and would be due and payable upon
          a declaration of acceleration of the maturity of that subordinated
          debt security;

     o    adversely affect any right of repayment at the option of the holder of
          any subordinated debt security of such series;

     o    change the place or currency of payment of principal of, or any
          premium or interest on, any subordinated debt security of such series;

     o    impair the right to institute suit for the enforcement of any such
          payment on or after the stated maturity of the subordinated debt
          security or any redemption date or repayment date for the subordinated
          debt security;

     o    reduce the percentage of holders of outstanding subordinated debt
          securities of such series necessary to modify or amend the indenture
          or to consent to any waiver under the indenture or reduce the
          requirements for voting or quorum described below;

     o    modify the change of control provisions, if any;

     o    reduce the percentage of outstanding subordinated debt securities of
          such series necessary to waive any past default; or

     o    modify any of the above requirements.

         Southern Union and the subordinated debt securities trustee may modify
and amend the indenture without the consent of any holder for the following
purposes:

     o    to evidence the succession of another entity to Southern Union as
          obligor under the indenture;

     o    to add to Southern Union's covenants for the benefit of the holders of
          all or any series of subordinated debt securities;

     o    to add events of default for the benefit of the holders of all or any
          series of subordinated debt securities;

     o    to add or change any provisions of the subordinated debt securities
          indenture to facilitate the issuance of bearer securities;

     o    to change or eliminate any provisions of the indenture but only if any
          such change or elimination will become effective only when there are
          no outstanding subordinated debt securities of any series created
          prior to the change or elimination that is entitled to the benefit of
          such provision;

     o    to establish the form or terms of subordinated debt securities of any
          other series;

     o    secure the subordinated debt securities;

     o    to provide for the acceptance of appointment by a successor trustee or
          facilitate the administration of the trust under the indenture by more
          than one trustee; and

     o    to change the indenture with respect to the authentication and
          delivery of additional series of subordinated debt securities, in
          order to cure any ambiguity, defect or inconsistency in the indenture,
          but only if such action does not adversely affect the interest of
          holders of subordinated debt securities of any series in any material
          respect.

         The indenture contains provisions for convening meetings of the holders
of subordinated debt securities of a series if subordinated debt securities of
that series are issuable as bearer securities. A meeting may be called at any
time by the subordinated debt securities trustee, by Southern Union or by the
holders of at least 10% in principal amount of the subordinated debt securities
of such series outstanding. In any case, notice must be given as provided in the
indenture. Any resolution presented at a meeting or duly reconvened adjourned
meeting at which a quorum is present may be adopted by the affirmative vote of
the holders of a majority in principal amount of the subordinated debt
securities of that series, except for any consent that must be given by the
holder of each subordinated debt security affected, as described above in this
section. Any resolution passed or decision made in accordance with the indenture
at any duly held meeting of holders of subordinated debt securities of that
series will be binding on all holders of the subordinated debt securities of
that series. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will consist of persons entitled to vote a majority in
principal amount of the subordinated debt securities of a series outstanding,
unless a specified percentage in principal amount of the subordinated debt
securities of a series outstanding is required for the consent or waiver, then
the persons entitled to vote such specified percentage in principal amount of
the outstanding subordinated debt securities of such series will constitute a
quorum. However, if any action is to be taken at a meeting of holders of
subordinated debt securities of any series with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action that the
indenture expressly provides may be made, given or taken by the holders of a
specified percentage in principal amount of all outstanding subordinated debt
securities affected, or of the holders of such series of subordinated debt
securities and one or more additional series, then:

     o    there will be no minimum quorum requirement for such meeting; and

     o    the principal amount of the outstanding subordinated debt securities
          of such series that vote in favor of such request, demand,
          authorization, direction, notice, consent, waiver or other action will
          be taken into account in determining whether such request, demand,
          authorization, direction, notice, consent, waiver or other action has
          been made, given or taken under the indenture.

Defeasance and Covenant Defeasance

         Southern Union may elect either (i) to defease and be discharged from
any and all obligations with respect to the subordinated debt securities (except
as otherwise provided in the indenture) ("defeasance") or (ii) to be released
from its obligations with respect to certain covenants that are described in the
Indenture ("covenant defeasance"), upon the deposit with the subordinated debt
securities trustee, in trust for such purpose, of money and/or specified
government obligations that through the payment of principal, premium, if any,
and interest in accordance with their terms will provide money in an amount
sufficient, without reinvestment, to pay the principal of, premium, if any, and
interest on the subordinated debt securities of such series to maturity or
redemption, as the case may be, and any mandatory sinking fund or analogous
payments thereon. As a condition to defeasance or covenant defeasance, Southern
Union must deliver to the subordinated debt securities trustee an opinion of
counsel to the effect that the holders of the subordinated debt securities of
such series will not recognize income, gain or loss for United States federal
income tax purposes as a result of such defeasance or covenant defeasance and
will be subject to United States federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
or covenant defeasance had not occurred. Such opinion of counsel, in the case of
defeasance under clause (i) above, must refer to and be based upon a ruling of
the Internal Revenue Service or a change in applicable United States federal
income tax law occurring after the date of the applicable prospectus supplement.

         Southern Union may exercise its defeasance option with respect to the
subordinated debt securities of any series notwithstanding its prior exercise of
its covenant defeasance option. If Southern Union exercises its defeasance
option, payment of the subordinated debt securities of such series may not be
accelerated because of an event of default. If Southern Union exercises its
covenant defeasance option, payment of the subordinated debt securities of such
series may not be accelerated by reference to any covenant from which Southern
Union is released as described under clause (ii) above. However, if acceleration
were to occur for other reasons, the realizable value at the acceleration date
of the money and government obligations in the defeasance trust could be less
than the principal and interest then due on the subordinated debt securities of
such series, in that the required deposit in the defeasance trust is based upon
scheduled cash flow rather than market value, which will vary depending upon
interest rates and other factors.

Financial Information

         While any of the subordinated debt securities are outstanding, Southern
Union will file with the SEC, to the extent permitted under the Exchange Act,
the annual reports, quarterly reports and other documents otherwise required to
be filed with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act
even if Southern Union stops being subject to those sections, and Southern Union
will also provide to all holders and file with the trustees copies of such
reports and documents within 15 days after filing them with the SEC or, if its
filing such reports and documents with the SEC is not permitted under the
Exchange Act, within 15 days after Southern Union would have been required to
file such reports and documents if permitted, in each case at Southern Union's
cost.

Payment, Registration and Transfer

         Unless Southern Union specifies otherwise in a prospectus supplement,
it will pay principal, interest and any premium on the subordinated debt
securities, and they may be surrendered for payment or transferred, at the
offices of the subordinated debt securities trustee. Southern Union will make
payment on registered subordinated debt securities by checks mailed to the
persons in whose names the subordinated debt securities are registered or by
transfer to an account maintained by the registered holder on days specified in
the indenture or any prospectus supplement. If Southern Union makes subordinated
debt securities payments in other forms, we will specify the form and place in a
prospectus supplement.

         Southern Union will maintain a corporate trust office of the trustee or
another office or agency for the purpose of transferring or exchanging fully
registered subordinated debt securities, without the payment of any service
charge except for any tax or governmental charge.

         The subordinated debt securities issued to a trust or the property
trustee of such trust will be issued as registered subordinated debt securities.
Registered subordinated debt securities will be securities recorded in the
securities register kept at the corporate office of the subordinated debt
securities trustee for the trust that issued that series of securities.
Registered subordinated debt securities will be exchangeable for other
registered subordinated debt securities of the same series and of a like
aggregate principal amount and tenor in different authorized denominations.

         In the event of any redemption of subordinated debt securities,
Southern Union will not be required to:

     o    issue, register the transfer of or exchange subordinated debt
          securities of any series during a period beginning at the opening of
          business 15 days before any selection of subordinated debt securities
          of that series to be redeemed and ending at the close of business on
          (a) the day of mailing of the relevant notice of redemption if
          subordinated debt securities of the series are issuable only as
          registered subordinated debt securities, (b) the day of mailing of the
          relevant notice of redemption if the subordinated debt securities of
          the series are also issuable as registered subordinated debt
          securities and there is no publication, and (c) the day of the first
          publication of the relevant notice of redemption if the subordinated
          debt securities are issuable as bearer securities;

     o    register the transfer of or exchange any registered security, or
          portion thereof, called for redemption, except the unredeemed portion
          of any registered security being redeemed in part;

     o    issue, register the transfer of or exchange any subordinated debt
          securities that have been surrendered for repayment at the option of
          the holder, except any portion not to be repaid.

         If the subordinated debt securities are distributed to the holders of
the related trust preferred securities, the subordinated debt securities may be
represented by one or more global certificates registered in the name of Cede &
Co., as the nominee of DTC. The depository arrangements for such subordinated
debt securities are expected to be substantially similar to those in effect for
the trust preferred securities. For a description of DTC and the terms of the
depository arrangements relating to payments, transfer, voting rights,
redemptions and other notices and other matters, see "Description of the Trust
Preferred Securities--Book-Entry Only Issuance--The Depositary Trust Company."

Governing Law

         The subordinated debt securities and the indenture will be governed by,
and interpreted in accordance with, the laws of the State of New York.

Information Concerning the Subordinated Debt Securities Trustee

         Prior to the occurrence of a default with respect to the indenture and
after the curing or waiving of all events of default with respect to the
indenture, the subordinated debt securities trustee undertakes to perform only
those duties as are specifically set forth in the indenture. In case an event of
default has occurred and has not been cured or waived, the trustee will exercise
the same degree of care and skill as a prudent individual would exercise or use
in the conduct of his or her own affairs. Subject to these provisions, the
subordinated debt securities trustee is under no obligation to exercise any of
the powers vested in it by the indenture at the request of any holder of
subordinated debt securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities which might be incurred through the exercise
of those powers.

         Southern Union and certain of its affiliates may, from time to time,
maintain a banking relationship with the subordinated debt securities trustee.

Miscellaneous

         Southern Union will have the right at all times to assign any of its
rights or obligations under the Southern Union indenture to one of its direct or
indirect wholly-owned subsidiaries. In the event of such an assignment, Southern
Union will remain liable for all of its obligations. The indenture otherwise
will be binding upon and exist for the benefit of the parties to the
subordinated debt securities indenture and their successors and assigns. The
indenture provides that it may not otherwise be assigned by the parties thereto.

                        DESCRIPTION OF GLOBAL SECURITIES

Book-Entry, Delivery and Form

         Unless the company issuing the debt securities, trust preferred
securities, warrants, common stock, preferred stock, stock purchase contracts,
stock purchase units or depositary shares (the "securities") indicates
differently in a supplemental prospectus, the securities initially will be
issued in book-entry form and represented by one or more global notes or global
securities (collectively, "global securities"). The global securities will be
deposited with, or on behalf of, The Depositary Trust Company, New York, New
York, as depositary ("DTC"), and registered in the name of Cede & Co., the
nominee of DTC. Unless and until it is exchanged for individual certificates
evidencing securities under the limited circumstances described below, a global
security may not be transferred except as a whole by the depositary to its
nominee or by the nominee to the depositary, or by the depositary or its nominee
to a successor depositary or to a nominee of the successor depositary.

         DTC has advised each of the issuing companies that it is:

     o    a limited-purpose trust company organized under the New York Banking
          Law;

     o    a "banking organization" within the meaning of the New York Banking
          Law;

     o    a member of the Federal Reserve System;

     o    a "clearing corporation" within the meaning of the New York Uniform
          Commercial Code; and a "clearing agency" registered pursuant to the
          provisions of Section 17A of the Securities Exchange Act of 1934.

         DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among its participants of securities transactions,
including transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, which eliminates the
need for physical movement of securities certificates. "Direct participants" in
DTC include securities brokers and dealers, including underwriters, banks, trust
companies, clearing corporations and other organizations. DTC is owned by a
number of its direct participants and by the New York Stock Exchange, Inc., the
American Stock Exchange LLC and the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to others, which we sometimes
refer to as "indirect participants," that clear transactions through or maintain
a custodial relationship with a direct participant either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the SEC.

         Purchases of securities within the DTC system must be made by or
through direct participants, which will receive a credit for those securities on
DTC's records. The ownership interest of the actual purchaser of a security,
which we sometimes refer to as a "beneficial owner," is in turn recorded on the
direct and indirect participants' records. Beneficial owners of securities will
not receive written confirmation from DTC of their purchases. However,
beneficial owners are expected to receive written confirmations providing
details of their transactions, as well as periodic statements of their holdings,
from the direct or indirect participants through which they purchased
securities. Transfers of ownership interests in global securities are to be
accomplished by entries made on the books of participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates representing
their ownership interests in the global securities except under the limited
circumstances described below.

         To facilitate subsequent transfers, all global securities deposited
with DTC will be registered in the name of DTC's nominee, Cede & Co. The deposit
of securities with DTC and their registration in the name of Cede & Co. will not
change the beneficial ownership of the securities. DTC has no knowledge of the
actual beneficial owners of the securities. DTC's records reflect only the
identity of the direct participants to whose accounts the securities are
credited, which may or may not be the beneficial owners. The participants are
responsible for keeping account of their holdings on behalf of their customers.

         So long as the securities are in book-entry form, you will receive
payments and may transfer securities only through the facilities of the
depositary and its direct and indirect participants. The company issuing the
securities will maintain an office or agency in the Borough of Manhattan, the
City of New York where notices and demands in respect of the securities and the
applicable indenture may be delivered to us and where certificated securities
may be surrendered for payment, registration of transfer or exchange. That
office or agency, with respect to the applicable indenture, will initially be
the office of the trustee which is currently located at 100 Wall Street, Suite
1600, New York, New York 10005, in the case of U.S. Bank Trust National
Association, and 101 Barclay Street, Floor 21, New York, New York 10286, in the
case of The Bank of New York.

         Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any legal requirements in effect from time
to time.

         Redemption notices will be sent to DTC or its nominee. If less than all
of the securities of a particular series are being redeemed, DTC will determine
the amount of the interest of each direct participant in the securities of such
series to be redeemed in accordance with DTC's procedures.

         In any case where a vote may be required with respect to securities of
a particular series, neither DTC nor Cede & Co. will give consents for or vote
the global securities. Under its usual procedures, DTC will mail an omnibus
proxy to us as soon as possible after the record date. The omnibus proxy assigns
the consenting or voting rights of Cede & Co. to those direct participants to
whose accounts the securities of such series are credited on the record date
identified in a listing attached to the omnibus proxy.

         So long as securities are in book-entry form, the company issuing such
securities will make payments on those securities to the depositary or its
nominee, as the registered owner of such securities, by wire transfer of
immediately available funds. If securities are issued in definitive certificated
form under the limited circumstances described below, the company issuing the
securities will have the option of paying interest by check mailed to the
addresses of the persons entitled to payment or by wire transfer to bank
accounts in the United States designated in writing to the applicable trustee at
least 15 days before the applicable payment date by the persons entitled to
payment.

         Principal and interest payments on the securities will be made to Cede
& Co., as nominee of DTC. DTC's practice is to credit direct participants'
accounts on the relevant payment date unless DTC has reason to believe that it
will not receive payment on the payment date. Payments by direct and indirect
participants to beneficial owners will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in "street name." Those payments will be
the responsibility of participants and not of DTC or us, subject to any legal
requirements in effect from time to time. Payment of principal and interest to
Cede & Co. is our responsibility, disbursement of payments to direct
participants is the responsibility of DTC and disbursement of payments to the
beneficial owners is the responsibility of direct and indirect participants.

         Except under the limited circumstances described below, purchasers of
securities will not be entitled to have securities registered in their names and
will not receive physical delivery of securities. Accordingly, each beneficial
owner must rely on the procedures of DTC and its participants to exercise any
rights under the securities and the applicable indenture.

         The laws of some jurisdictions may require that some purchasers of
securities take physical delivery of securities in definitive form. Those laws
may impair the ability to transfer or pledge beneficial interests in securities.

         DTC is under no obligation to provide its services as depositary for
the securities and may discontinue providing its services at any time. Neither
the company issuing the securities nor the applicable trustee will have any
responsibility for the performance by DTC or its direct participants or indirect
participants under the rules and procedures governing DTC. As noted above,
beneficial owners of a particular series of securities generally will not
receive certificates representing their ownership interests in those securities.
However, if DTC notifies the company issuing such securities that it is
unwilling or unable to continue as a depositary for the global security or
securities representing such series of securities or if DTC ceases to be a
clearing agency registered under the Securities Exchange Act at a time when it
is required to be registered and a successor depositary is not appointed within
90 days of the notification to us or of our becoming aware of DTC's ceasing to
be so registered, as the case may be; the company issuing such securities
determines, in its sole discretion, not to have such securities represented by
one or more global securities; or an Event of Default under the indenture has
occurred and is continuing with respect to such series of securities, the
company issuing such securities will prepare and deliver certificates for such
securities in exchange for beneficial interests in the global securities. Any
beneficial interest in a global security that is exchangeable under the
circumstances described in the preceding sentence will be exchangeable for
securities in definitive certificated form registered in the names that the
depositary directs. It is expected that these directions will be based upon
directions received by the depositary from its participants with respect to
ownership of beneficial interests in the global securities.

                                     EXPERTS

         The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report on Form 10-K of Southern Union Company for the
year ended June 30, 2003, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

                  VALIDITY OF THE SECURITIES AND THE GUARANTEES

         Unless stated otherwise in the applicable prospectus supplement, the
validity of the securities and the binding nature of the obligations represented
by the debt securities, guarantees, units, warrants and contracts offered hereby
will be passed upon for us by Fleischman and Walsh, L.L.P., Washington, D.C.
Attorneys in that firm beneficially own shares of common stock that, in the
aggregate, represent less than one percent (1%) of the outstanding shares of
common stock of Southern Union. Certain United States federal income taxation
matters will be passed upon for Southern Union, Southern Union Financing II and
Southern Union Financing III by special tax counsel to the Company and the
Trusts when appropriate with respect to any particular offering.

          PLAN OF DISTRIBUTION OF SOUTHERN UNION COMPANY AND THE TRUSTS

         We may sell the securities described in this prospectus from time to
time in one or more transactions:

(a) to purchasers directly;

(b) to underwriters for public offering and sale by them;

(c) through agents;

(d) through dealers; or

(e) through a combination of any of the foregoing methods of sale.

         We may distribute the securities from time to time in one or more
transactions at:

(a) a fixed price or prices, which may be changed;

(b) market prices prevailing at the time of sale;

(c) prices related to such prevailing market prices; or

(d) negotiated prices.

         Offered securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more remarketing firms, acting as principals for their
own accounts or as agents for us. Any remarketing firm will be identified and
the terms of its agreements, if any, with us, and any related compensation
arrangements contemplated thereby will be described in the applicable prospectus
supplement.

          The  Company  may  enter  into  derivative  transactions  with  third
parties, or sell securities not covered by this prospectus to third parties in
privately negotiated transactions. If the applicable prospectus supplement
indicates, in connection with those derivatives, the third parties may sell
securities covered by this prospectus and the applicable prospectus supplement,
including in short sale transactions. If so, the third parties may use
securities pledged by the Company or borrowed from the Company or others to
settle those sales or to close out any related open borrowings of stock, and may
use securities received from the Company in settlement of those derivatives to
close out any related open borrowings of stock. The third parties in such sale
transactions will be underwriters and, if not identified in this prospectus,
will be identified in the applicable prospectus supplement (or a post-effective
amendment).

          We or one of our affiliates may loan or pledge securities to a
financial institution or other third party that in turn may sell the securities
using this prospectus. Such financial institution or third party may transfer
its short position to investors in our securities or in connection with a
simultaneous offering of other securities offered by this prospectus or
otherwise.

Direct Sales

         We may sell the securities directly to institutional investors or
others. A prospectus supplement will describe the terms of any sale of
securities we are offering hereunder.

To Underwriters

         The applicable prospectus supplement will name any underwriter involved
in a sale of securities. Underwriters may offer and sell securities at a fixed
price or prices, which may be changed, or from time to time at market prices or
at negotiated prices. Underwriters may be deemed to have received compensation
from us from sales of securities in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of securities for
whom they may act as agent.

         Underwriters may sell securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be changed from
time to time) from the purchasers for whom they may act as agent.

         Unless otherwise provided in a prospectus supplement, the obligations
of any underwriters to purchase securities or any series of securities will be
subject to certain conditions precedent, and the underwriters will be obligated
to purchase all such securities if any are purchased.

Through Agents and Dealers

         We will name any agent involved in a sale of securities, as well as any
commissions payable by us to such agent, in a prospectus supplement. Unless we
indicate differently in the prospectus supplement, any such agent will be acting
on a reasonable efforts basis for the period of its appointment.

         If we utilize a dealer in the sale of the securities being offered
pursuant to this prospectus, we will sell the securities to the dealer, as
principal. The dealer may then resell the securities to the public at varying
prices to be determined by the dealer at the time of resale.

Delayed Delivery of Securities Purchase Contracts

         We may authorize our agents and underwriters to solicit offers by
certain institutions to purchase our securities at the public offering price by
means of delayed delivery of our securities purchase contracts. Such delayed
delivery contracts will provide for payment for, and delivery of, the underlying
security on future dates.

o              If we use delayed delivery contracts, we will disclose that we
               are using them in the prospectus supplement and we will tell you
               when we will demand payment and delivery of the securities under
               the delayed delivery contracts.

o              These delayed delivery contracts will be subject only to the
               conditions that we set forth in the prospectus supplement.

o              We will indicate in our prospectus supplement the commission that
               underwriters and agents soliciting purchases of our securities
               under delayed delivery contracts will be entitled to receive.

General Information

         Underwriters, dealers and agents participating in a sale of the
securities may be deemed to be underwriters as defined in the Securities Act,
and any discounts and commissions received by them and any profit realized by
them on resale of the securities may be deemed to be underwriting discounts and
commissions, under the Securities Act. We may have agreements with underwriters,
dealers and agents to indemnify them against certain civil liabilities,
including liabilities under the Securities Act, and to reimburse them for
certain expenses.

         Underwriters or agents and their associates may be customers of, engage
in transactions with or perform services for us or our affiliates in the
ordinary course of business.

         Unless we indicate differently in a prospectus supplement, we will not
list the securities on any securities exchange, other than shares of our common
stock. The securities, except for our common stock, will be a new issue of
securities with no established trading market. Any underwriters that purchase
securities for public offering and sale may make a market in such securities,
but such underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. We make no assurance as to the
liquidity of or the trading markets for any securities.

                   PLAN OF DISTRIBUTION OF SELLING STOCKHOLDER

         The Southern Union Company supplemental retirement plan beneficially
owns 405,664 shares of common stock, or .005% of the issued and outstanding
shares of common stock as of December 31, 2003, which it intends to resell under
this prospectus. We will not receive any proceeds from sale by this selling
stockholder. The selling stockholder may collectively sell or distribute up to
405,664 shares of common stock, which are all of the shares of common stock
beneficially owned by it, from time to time through dealers or brokers or other
agents or directly to one or more purchasers in a variety of ways, including:

     o    transactions, which may involve crosses and block transactions, on the
          New York Stock Exchange on which the shares of common stock are listed
          for trading;

     o    in the over-the-counter market transactions;

     o    in private transactions or negotiated transactions;

     o    through short sales, put and call option or other derivative
          transactions, although neither Southern Union Company nor the selling
          stockholder concedes that any such transactions would constitute a
          sale of the shares of Southern Union Company's common stock owned by
          the selling stockholder for purposes of the Securities Act;

     o    though brokers or dealers (who may act as agent or principal);

     o    by pledge to secure debts and other obligations; or

     o    in a combination of these types of transactions.

         The selling stockholder, or its donee, pledgee, transferee or other
successor in interest, may sell its shares of common stock at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices, or at fixed prices, which may be changed.

         The selling stockholder may use brokers, dealers or agents to sell its
shares of common stock. Any broker, dealer or agent may receive compensation in
the form of discounts, concessions or commissions from the selling stockholder,
the purchase or such other persons who may be effecting sales hereunder. Some
sales may involve shares in which the selling stockholder has granted security
interests and which are being sold because of foreclosure of those security
interests. At the time a particular offering of shares of common stock is made
and to the extent required, the aggregate number of shares being offered, the
terms of the offering, including the names of the broker-dealers or agents, any
discounts, concessions or commissions and other terms constituting compensation
from the selling stockholder, and any discounts, concessions or commissions
allowed or re-allowed or paid to broker-dealers, will be sent forth in an
accompanying prospectus supplement.

         The selling stockholder may enter into hedging transactions with
broker-dealers or other financial institutions in connection with distribution
of the shares or otherwise. In such transactions, broker-dealers or other
financial institutions may engage in short sales of the shares of common stock
in the course of hedging the positions they assume with the selling stockholder.
The selling stockholder also may sell shares short and deliver the shares to
close out such short positions. The selling stockholder also may enter into
options, forward sales or other transactions with broker-dealers or other
financial institutions which may require the delivery to such broker-dealer or
financial institution of the shares. The broker-dealer or other financial
institution may then resell or otherwise transfer such shares pursuant to this
prospectus (as may be supplemented or amended to reflect such transaction). The
selling stockholder also may loan or pledge the shares to a broker-dealer or
other financial institution. The broker-dealer or other financial institution
may sell the shares so loaned, or upon a default the broker-dealer or other
financial institution may sell the pledged shares pursuant to this prospectus
(and any applicable prospectus supplement).

         The selling stockholder may also transfer shares that it owns by gift,
and, upon such transfer, the donee would have the same right of sale as the
selling stockholder.



<PAGE>


                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>

Item 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<S>                                                                                                  <C>
Securities and Exchange Commission Filing Fee................................................        $121,358
Rating Agency Fees...........................................................................        $150,000
Blue Sky Fees and Expenses...................................................................         $20,000
Trustee's Expenses...........................................................................         $10,000
Printing and Engraving Fees..................................................................         $50,000
Accounting Fees and Expenses.................................................................         $65,000
Legal Fees and Expenses......................................................................        $175,000
Miscellaneous................................................................................         $25,000

TOTAL........................................................................................        $616,358
                                                                                                     ========
</TABLE>







         All of the above except the Securities and Exchange Commission
registration fee (previously paid) are estimated.


Item 15.  Indemnification of Directors and Officers.

         Section 145 of the General Corporation Law of Delaware empowers a
corporation to indemnify its directors and officers, subject to certain
limitations.  Southern Union's Bylaws require Southern Union to indemnify its
respective directors and officers to the fullest extent permitted by law.

         Article TWELFTH of the Restated Certificate of Incorporation of
Southern Union eliminates personal liability of directors to the fullest extent
permitted by Delaware law. Section 145 of the Delaware General Corporation Law
provides that a Delaware corporation may indemnify any person against expenses,
fines and settlements actually and reasonably incurred by any such person in
connection with a threatened, pending or completed action, suit or proceeding in
which he is involved by reason of the fact that he is or was a director,
officer, employee or agent of such corporation, provided that (i) he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and (ii) with respect to any criminal action
or proceeding, he had no reasonable cause to believe his conduct was unlawful.
If the action or suit is by or in the name of the corporation, the corporation
may indemnify any such person against expenses actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect to any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation, unless and only to the extent that
the Delaware Court of Chancery or the court in which the action or suit is
brought determines upon application that, despite the adjudication of liability
but in light of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expense as the court deems proper.

           The directors and officers of Southern Union are covered by insurance
policies indemnifying against certain liabilities, including certain liabilities
arising under the Securities Act of 1933, as amended (the "Securities Act"),
which might be incurred by them in such capacities and against which they cannot
be indemnified by Southern Union. Southern Union has entered into an
Indemnification Agreement with each member of its Board of Directors. The
Indemnification Agreement provides the Directors with the contractual right to
indemnification for any acts taken in their capacity as a director of Southern
Union to the fullest extent permitted under Delaware law.

           Under each trust agreement, no Trustee, affiliate of a Trustee,
officer, director, shareholder, member, partner, employee, representative or
agent of the Trustee, or any employee or agent of the Trust or its affiliates
(each, an "Indemnified Person") shall be liable, responsible or accountable in
damages or otherwise to the Trust or to any officer, director, shareholder,
member, partner, employee, representative or agent of either the Trust or the
Trust's affiliates or to any holder of Trust Common Securities or Trust
Preferred Securities (each, a "Covered Person") for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith and in a manner such Indemnified Person
reasonably believed to be within the scope of the authority conferred upon such
Indemnified Person by the trust agreement or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence (or, in the case of the Property
Trustee, negligence) or willful misconduct with respect to such acts or
omissions.

           Any agents, dealers or underwriters who execute any of the agreements
filed as Exhibit 1.1 to this registration statement will agree to indemnify
Southern Union's directors and their officers who signed the registration
statement against certain liabilities that may arise under the Securities Act
with respect to information furnished to Southern Union by or on behalf of any
such indemnifying party.

Item 16.  Exhibits.

         Exhibits identified below in parentheses are on file with the SEC and
are incorporated herein by reference to such previous filings.All other exhibits
are provided as part of this electronic transmission.


                                    Document
Exhibit

(1)          Underwriting Agreements
1.1          Form of Underwriting Agreement for offering trust
             preferred securities (Southern Union Financing II and
             Southern Union Financing III).*
1.2    --    Form of Underwriting Agreement for offering debt securities
             (Southern Union Company).*
1.3    --    Form of Underwriting Agreement for offering preferred stock
             (Southern Union Company).*
1.4    --    Form of Underwriting Agreement for offering common stock
             (Southern Union Company).*
1.5    --    Form of Underwriting Agreement for offering stock purchase units
             (Southern Union Company).*
(4)          Instruments Defining the Rights of Security Holders, Including
             Indentures
4.1    --    Senior Debt Securities Indenture between Southern Union Company
             and JP Morgan Chase Bank (as successor to
             the Chase Manhattan Bank, N.A.), as Trustee.  (Filed as Exhibit
             4.1 to Southern Unions' Current Report on
             Form 8-K dated February 15, 1994 and incorporated herein by
             reference.)
4.2    --    Subordinated Debt Securities Indenture between Southern Union
             Company and JP Morgan Chase Bank (as
             successor to The Chase Manhattan Bank, N.A.), as Trustee.
             (Filed as Exhibit 4-G to Southern Union's
             Registration Statement on Form S-3 (No.  33-58297) and
             incorporated herein by reference).
4.3    --    Certificate of Trust of Southern Union Financing II
             (previously filed as Exhibit 4-B to Southern Union's
             Registration Statement on Form S-3 (No. 33-58297) and
             incorporated herein by reference).
4.4    --    Certificate of Trust of Southern Union Financing III
             (previously filed as Exhibit 4-C to Southern Union's
             Registration Statement on Form S-3 (No. 33-58297) and
             incorporated herein by reference).
4.5    --    Form of Trust Agreement (Amended and Restated Declaration of Trust)
             of Southern Union Financing II.*
4.6    --    Form of Trust Agreement (Amended and Restated Declaration of Trust)
             of Southern Union Financing III.*
4.7    --    Forms of Supplemental Indenture to Subordinated Debt Securities
             Indenture issued in connection with
             Southern Union Financing II and Southern Union Financing III Trust
             Preferred Securities.*
4.8    --    Form of Subordinated Debt Security (included in Exhibit 4.7).*
4.9    --    Form of Trust Preferred Security for Southern Union Financing II
             (included in Exhibit 4.5).*
4.10   --    Form of Trust Preferred Security for Southern Union Financing III
             (included in Exhibit 4.6).*
4.11   --    Form of Guarantee with respect to Trust Preferred Securities.*
4.12   --    Form of Warrant Agreement.*
4.13   --    Form of Warrant Certificate (included in Exhibit 4.12).*
4.14   --    Form of Deposit Agreement.*
4.15   --    Form of Depositary Receipt (included in Exhibit 4.14).*
4.16   --    Form of Purchase Contract.*
4.17   --    Form of Purchase Unit.*
(5)          Opinion re Legality
5.1    --    Opinion of Fleischman and Walsh, L.L.P., including the consent of
             such firm.**
(8)          Opinion re Tax Matters*
8.1    --    Opinion of special tax counsel to Southern Union Company as to
             certain federal income taxation matters,
             including the consent of such firm.*
(12)         Statements re Computation of Ratios
12.1   --    Computation of Ratio of Earnings to Fixed Charges of Southern
             Union Company (filed herewith).
12.2   --    Proforma Ratio of Earnings to Fixed Charges.*
(23)         Consents of Experts and Counsel
23.1   --    Consent of Independent Registered Public Accounting Firm.
23.2   --    Consent of Fleischman and Walsh, L.L.P.  contained in the opinion
             of counsel filed as Exhibit 5.1.**
23.3   --    Consent of special tax counsel to Southern Union Company will be
             contained in the opinion of counsel filed as Exhibit 8.1.*
(24)         Powers of Attorney
24.1   --    Power of Attorney of the Directors of Southern Union Company.**
(25)         Statements of Eligibility of Trustees
25.1         -- Statement of Eligibility under the Trust Indenture
             Act of 1939, as amended, of JP Morgan Chase Bank, as
             Trustee under the Subordinated Debt Securities
             Indenture (previously filed as Exhibit 25.1 to Southern
             Union's Registration Statement on Form S-3 (No.
             333-102388) Amendment No. 1 and incorporated herein by
             reference).
25.2   --    Statement of Eligibility under the Trust Indenture
             Act of 1939, as amended, of Wilmington Trust Company,
             as Trustee under the Trust Agreement (Amended and
             Restated Declaration of Trust) of Southern Union
             Financing II (previously filed as Exhibit 25.2 to
             Southern Union's Registration Statement on Form S-3
             (No. 333-102388) Amendment No. 1 and incorporated
             herein by reference).
25.3   --    Statement of Eligibility under the Trust Indenture
             Act of 1939, as amended, of Wilmington Trust Company,
             as Trustee under the Trust Agreement (Amended and
             Restated Declaration of Trust) of Southern Union
             Financing III (previously filed as Exhibit 25.3 to
             Southern Union's Registration Statement on Form S-3
             (No. 333-102388) Amendment No. 1 and incorporated
             herein by reference).
25.4   --    Statement of Eligibility under the Trust Indenture
             Act of 1939, as amended, of Wilmington Trust Company,
             as Trustee of the trust guarantees of Southern Union
             for the benefit of the holders of trust preferred
             securities of Southern Union Financing II (previously
             filed as Exhibit 25.4 to Southern Union's Registration
             Statement on Form S-3 (No. 333-102388) Amendment No. 1
             and incorporated herein by reference).
25.5   --    Statement of Eligibility under the Trust Indenture
             Act of 1939, as amended, of Wilmington Trust Company,
             as Trustee of the trust guarantees of Southern Union
             for the benefit of the holders of trust preferred
             securities of Southern Union Financing III (previously
             filed as Exhibit 25.5 to Southern Union's Registration
             Statement on Form S-3 (No. 333-102388) Amendment No. 1
             and incorporated herein by reference).
-----------
*  To be filed by amendment or by Issuer as part of a current report on Form 8-K
** Previously filed.

Item 17.  Undertaking.

         Each of the Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of Southern
Union's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

         Each of the Registrants hereby undertakes:

(1)              To file, during any period in which offers or sales are being
                 made, a post-effective amendment to this Registration
                 Statement:

     (i)  To include any prospectus required by Section 10(a)(3)of the
          Securities Act.

     (ii) To reflect in the prospectus any facts or events arising after the
          effective date of the Registration Statement (or the most recent
          post-effective amendment thereof) that, individually or in the
          aggregate, represent a fundamental change in the information set forth
          in the Registration Statement. Notwithstanding the foregoing, any
          increase or decrease in volume of securities offered (if the total
          dollar value of securities offered would not exceed that which was
          registered) and any deviation from the low or high end of the
          estimated maximum offering range may be reflected in the form of
          prospectus filed with the Commission pursuant to Rule 424(b) if, in
          the aggregate, the changes in volume and price represent no more than
          20 percent change in the maximum aggregate offering price set forth in
          the "Calculation of Registration Fee" table in the effective
          registration statement.

     (iii) To include any material information with respect to the Plan of
          Distribution not previously disclosed in the Registration Statement or
          any material change to such information in the Registration Statement.

(2)              That, for the purpose of determining any liability under the
                 Securities Act, each such post-effective amendment shall be
                 deemed to be a new registration statement relating to the
                 securities offered therein, and the offering of such securities
                 at that time shall be deemed to be the initial bona fide
                 offering thereof.

(3)              To remove from registration by means of a post-effective
                 amendment any of the securities being registered which remain
                 unsold at the termination of the offering.

         Each of the Registrants hereby undertakes that:

     (1)  For purposes of determining any liability under the Securities ct, the
          information omitted from the form of prospectus filed s part of this
          registration statement in reliance upon Rule 30A and contained in the
          form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
          or (4) or 497(h) under he Securities Act shall be deemed to be part of
          the registration statement as of the time it was declared effective.

     (2)  For the purposes of determining any liability under the Securities
          Act, each post-effective amendment that contains a form of prospectus
          shall be deemed to be a new registration statement relating to the
          securities offered therein, and the offering of such securities at
          that time shall be deemed to be the initial bona fide offering
          thereof.

         The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1933 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.



<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, Southern
Union Company certifies that it has reasonable grounds to believe that it meets
the requirements for filing on Form S-3 and has duly caused this Amendment No. 2
to the Registration Statement (SEC File No. 333-113757) to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Wilkes-Barre, State of Pennsylvania, on June 25, 2004.

                             SOUTHERN UNION COMPANY
                             By:
                                 /s/  DAVID J. KVAPIL

                                 Name:     David J.  Kvapil

                                 Title:    Executive Vice President and Chief
                                           Financial Officer

         Pursuant to the  requirements  of the  Securities  Act of 1933 , this
Amendment No. 2 to the Registration Statement (SEC File No.333-113757) has been
signed by the following persons in the capacities indicated on June 25, 2004.


Signature/Name                       Title
--------------                       -----

GEORGE L.  LINDEMANN*                Chief Executive Officer and Director
JOHN E.  BRENNAN*                    Director
FRANK W.  DENIUS*                    Director
THOMAS F.  KARAM*                    President and Director
DAVID BRODSKY*                       Director
KURT A.  GITTER, M.D.*               Director
ADAM M.  LINDEMANN*                  Director
GEORGE ROUNTREE, III*                Director
RONALD M.  SIMMS*                    Director


David J.  Kvapil                     Executive Vice President and Chief
* by /s/ DAVID J.  KVAPIL            Financial Officer (Principal
                                     Accounting Officer)


Attorney-in-fact




<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, each of
Southern Union Financing Trust II and Southern Union Financing Trust III
certificates that it has reasonable grounds to believe that they meet the
requirements for filing on Form S-3 and have duly caused this Amendment No. 2 to
the Registration Statement (SEC File No. 333-113757) to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Wilkes-Barre,
State of Pennsylvania, on June 25, 2004.

                                        SOUTHERN UNION FINANCING II
                                        By:    /s/  DAVID J. KVAPIL

                                               Name: David J.  Kvapil
                                               Title:  Trustee
                                        By:    /s/  DENNIS K. MORGAN

                                               Name: Dennis K.  Morgan
                                               Title:  Trustee
                                        SOUTHERN UNION FINANCING III
                                        By:    /s/  DAVID J. KVAPIL

                                               Name: David J.  Kvapil
                                               Title:  Trustee
                                        By:    /s/  DENNIS K. MORGAN

                                               Name: Dennis K.  Morgan
                                               Title:  Trustee



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                                                                    Exhibit 12.1

                   RATIO OF EARNINGS TO COMBINED FIXED CHARGES
                    AND PREFERRED STOCK DIVIDEND REQUIREMENTS

<TABLE>
<CAPTION>


                                                       Nine Months                               Year Ended June 30,
                                                          Ended    -----------------------------------------------------------------
                                                        March 31,
                                                          2004            2003         2002         2001        2000           1999
                                                          ----            ----         ----         ----        ----           ----

                                                                            (dollars in thousands)
<S>                                                    <C>           <C>          <C>          <C>          <C>           <C>
FIXED CHARGES:
Interest ..........................................    $ 105,382     $  89,904    $  97,536    $ 109,290    $  59,191     $  43,867
Net amortization of debt discount and
   premium and issuance expense ...................       (7,727)        2,919        2,936        3,118        1,242           965
Interest portion of rental expense ................        4,652         1,447        2,445        2,753        2,718         2,013
                                                       ---------     ---------    ---------    ---------    ---------     ----------
   Total fixed charges ............................      102,307        94,270      102,917      115,161       63,151        46,845
Preferred dividend requirements ...................        8,345            --           --           --           --            --
                                                       ---------     ---------    ---------    ---------    ---------     ----------
   Total fixed charges and preferred
     dividend requirements ........................    $ 110,652     $  94,270    $ 102,917    $ 115,161    $  63,151     $  46,845
                                                       =========     =========    =========    =========    =========     =========
EARNINGS:
Consolidated pre-tax income (loss) from
   continuing operations ..........................    $ 177,838    $   67,942    $   4,931    $  70,258    $ (12,363)    $ (13,506)
Total fixed charges ...............................      102,307        94,270      102,917      115,161       63,151        46,845
                                                       ---------     ---------    ---------    ---------    ---------     ----------
   Earnings available for combined fixed
     charges and preferred dividend
     requirements .................................    $ 280,145    $  162,212    $ 107,848    $ 185,419    $  50,788     $  33,339
                                                       =========     =========    =========    =========    =========     =========
Ratio of earnings to combined fixed charges
 and preferred stock dividend requirements                  2.53          1.72         1.05         1.61         --(a)         --(a)
                                                       =========     =========    =========    =========    =========     =========

</TABLE>


(a)      The earnings were inadequate to cover fixed charges by approximately
         $12.4 million and $13.5 million for the years ended June 30, 2000 and
         1999, respectively. In accordance with generally accepted accounting
         principles, the Company did not allocate interest expense or other
         corporate costs to discontinued operations for all periods presented,
         resulting in the recognition of losses from continuing operations for
         the years ended June 30, 2000 and 1999. All outstanding debt of
         Southern Union Company and subsidiaries, except for Panhandle Energy,
         is maintained at the corporate level.





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