92232--3/2/2009--SOUTHERN_NATURAL_GAS

related topics

{financial, litigation, operation}

{gas, price, oil}

{cost, contract, operation}

{condition, economic, financial}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{operation, natural, condition}

{loss, insurance, financial}

{personnel, key, retain}

A substantial portion of our revenues are generated from transportation contracts that must be renegotiated periodically. We are exposed to the credit risk of our customers and our credit risk management may not be adequate to protect against such risk. Fluctuations in energy commodity prices could adversely affect our business. The agencies that regulate us and our customers could 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. The expansion of our business by constructing new facilities subjects us to construction and other risks that may adversely affect our financial results. Adverse general domestic economic conditions could negatively affect our operating results, financial condition, or liquidity. We are subject to financing and interest rate risk. Risks Related to Our Affiliation with El Paso and the MLP We are a majority owned subsidiary of El Paso. Our business requires the retention and recruitment of a skilled workforce and the loss of employees could result in the failure to implement our business plan. Our relationship with El Paso and its financial condition subjects us to potential risks that are beyond our control.

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92232--3/2/2009--SOUTHERN_NATURAL_GAS_CO