92232--3/16/2006--SOUTHERN_NATURAL_GAS

related topics

{gas, price, oil}

{financial, litigation, operation}

{debt, indebtedness, cash}

{cost, contract, operation}

{operation, natural, condition}

{cost, regulation, environmental}

{control, financial, internal}

{customer, product, revenue}

The revenues of our pipeline businesses are generated under contracts that must be renegotiated periodically. Fluctuations in energy commodity prices could adversely affect our business. The agencies that regulate us and our customers affect our profitability. Environmental compliance and remediation costs and the costs of environmental liabilities could exceed our estimates. Our operations are subject to operational hazards and uninsured risks. Four customers contract for a majority of our firm transportation capacity. The expansion of our business by constructing new facilities subjects us to construction and other risks that may adversely affect our financial results. Risks Related to Our Affiliation with El Paso Our relationship with El Paso and its financial condition subjects us to potential risks that are beyond our control. Our system of internal controls is designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes. A loss of public confidence in the quality of our internal controls or disclosures could have a negative impact on us. Our subsidiary may be subject to a change of control under certain circumstances. We are a wholly owned subsidiary of El Paso.

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92232--3/16/2006--SOUTHERN_NATURAL_GAS_CO