SOUTHERN NATURAL GAS CO - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-2745

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SOUTHERN NATURAL GAS COMPANY
(Exact Name of Registrant as Specified in its Charter)

DELAWARE 63-0196650
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)

EL PASO BUILDING
1001 LOUISIANA STREET 77002
HOUSTON, TEXAS (Zip Code)
(Address of Principal Executive Offices)

Telephone Number: (713) 420-2600

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Common stock, par value $3.75 per share. Shares outstanding on August 13,
2002: 1,000

SOUTHERN NATURAL GAS COMPANY MEETS THE CONDITIONS OF GENERAL INSTRUCTION
H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS REPORT WITH A REDUCED
DISCLOSURE FORMAT AS PERMITTED BY SUCH INSTRUCTION.

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PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SOUTHERN NATURAL GAS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
(UNAUDITED)

See accompanying notes.

1

SOUTHERN NATURAL GAS COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)

See accompanying notes.

2

SOUTHERN NATURAL GAS COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)

See accompanying notes.

3

SOUTHERN NATURAL GAS COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION

We prepared this Quarterly Report on Form 10-Q under the rules and
regulations of the United States Securities and Exchange Commission. Because
this is an interim period filing presented using a condensed format, it does not
include all of the disclosures required by generally accepted accounting
principles. You should read it along with our 2001 Annual Report on Form 10-K
which includes a summary of our significant accounting policies and other
disclosures. The financial statements as of June 30, 2002, and for the quarters
and six months ended June 30, 2002 and 2001, are unaudited. We derived the
balance sheet as of December 31, 2001, from the audited balance sheet filed in
our Form 10-K. In our opinion, we have made all adjustments, all of which are of
a normal, recurring nature, to fairly present our interim period results. Due to
the seasonal nature of our businesses, information for interim periods may not
indicate the results of operations for the entire year. In addition, prior
period information presented in these financial statements includes
reclassifications which were made to conform to the current period presentation.
These reclassifications have no effect on our previously reported net income or
stockholder's equity.

Our accounting policies are consistent with those discussed in our Form
10-K, except as discussed below:

Asset Impairments

On January 1, 2002, we adopted Statement of Financial Accounting Standards
(SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.
SFAS No. 144 changed the accounting requirements related to when an asset
qualifies as held for sale or as a discontinued operation and the way in which
we evaluate impairments of assets. It also changes accounting for discontinued
operations such that we can no longer accrue future operating losses in these
operations. There was no initial financial statement impact of adopting this
statement.

2. DEBT AND OTHER CREDIT FACILITIES

In January 2002, we repaid $100 million of our 7.85% notes due 2002. We
also filed a new shelf registration statement in January 2002, increasing the
amount of debt we could issue from $100 million to $300 million. In February
2002, we issued $300 million aggregate principal amount of 8.0% notes due 2032.
Proceeds were approximately $297 million, net of issuance costs. This issuance
used the remaining capacity on our shelf registration statement. In May 2002, we
repaid $100 million of our 8.625% notes due 2002.

3. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

In 1997, we and a number of our affiliates were named defendants in actions
brought by Jack Grynberg on behalf of the U.S. Government under the False Claims
Act. Generally, these complaints allege an industry-wide conspiracy to
underreport the heating value as well as the volumes of the natural gas produced
from federal and Native American lands, which deprived the U.S. Government of
royalties. These matters have been consolidated for pretrial purposes (In re:
Natural Gas Royalties Qui Tam Litigation, U.S. District Court for the District
of Wyoming, filed June 1997). In May 2001, the court denied the defendants'
motions to dismiss.

We and a number of our affiliates were named defendants in Quinque
Operating Company, et al v. Gas Pipelines and Their Predecessors, et al, filed
in 1999 in the District Court of Stevens County, Kansas. This class action
complaint alleges that the defendants mismeasured natural gas volumes and
heating content of natural gas on non-federal and non-Native American lands. The
Quinque complaint was transferred to the same court handling the Grynberg
complaint and has now been sent back to Kansas State Court for further
proceedings. A motion to dismiss this case is pending.

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In addition to the above matters, we are also a named defendant in numerous
lawsuits and governmental proceedings that arise in the ordinary course of our
business.

For each of our outstanding legal matters, we evaluate the merits of the
case, our exposure to the matter, possible legal or settlement strategies and
the likelihood of an unfavorable outcome. If we determine that an unfavorable
outcome is probable and can be estimated, we establish the necessary accruals.
As of June 30, 2002, we had no reserves for our outstanding legal matters.

While the outcome of our outstanding legal matters cannot be predicted with
certainty, based on the information known to date, we do not expect the ultimate
resolution of these matters to have a material adverse effect on our financial
position, operating results or cash flows. As new information becomes available
or relevant developments occur, we will establish accruals as appropriate. The
impact of these changes may have a material effect on our results of operations.

Environmental Matters

We are subject to extensive federal, state and local laws and regulations
governing environmental quality and pollution control. These laws and
regulations require us to remove or remedy the effect on the environment of the
disposal or release of specified substances at current and former operating
sites. As of June 30, 2002, we had a reserve of approximately $7 million for
expected remediation costs (including related environmental litigation). In
addition, we expect to make capital expenditures for environmental matters of
approximately $6 million in the aggregate for the years 2002 through 2007. These
expenditures primarily relate to compliance with clean air regulations.

We have been designated and have received notice that we could be
designated, or have been asked for information to determine whether we could be
designated, as a Potentially Responsible Party with respect to one active site
under the Comprehensive Environmental Response, Compensation and Liability Act
or state equivalents. We are currently evaluating our potential share, if any,
of the remediation costs.

While the outcome of our outstanding environmental matters cannot be
predicted with certainty, based on the information known to date and our
existing accruals, we do not expect the ultimate resolution of these matters to
have a material adverse effect on our financial position, operating results or
cash flows. It is possible that new information or future developments could
require us to reassess our potential exposure related to environmental matters.
It is also possible that other developments, such as increasingly strict
environmental laws and regulations and claims for damages to property,
employees, other persons and the environment resulting from our current or past
operations, could result in substantial costs and liabilities in the future. As
new information becomes available, or relevant developments occur, we will
review our accruals and make any appropriate adjustments. The impact of these
changes may have a material effect on our results of operations.

Rates and Regulatory Matters

In February 2000, the Federal Energy Regulatory Commission (FERC) issued
Order No. 637 which revised regulations regarding capacity release, capacity
segmentation, imbalance management services, operational flow orders and
pipeline penalties. On July 2, 2001, we filed a settlement addressing our
compliance with Order No. 637. We received an order on the settlement from the
FERC on April 11, 2002. The FERC approved our settlement, subject to
modifications related to our segmentation proposal, and rejected our proposed
changes to our cash-out mechanism. In May 2002, we sought rehearing and made a
compliance filing, which is subject to the outcome of our rehearing request.

In March 2000, the FERC issued an order which authorized the
recommissioning of our Elba Island liquefied natural gas (LNG) receiving
terminal near Savannah, Georgia. In July 2001, the FERC issued a final order
approving a modification of the sendout facilities at the terminal subject to
several conditions. In October 2001, we received an initial cargo of LNG in
order to test the facilities. In October 2001, we also applied to increase Elba
Island's initial rates to reflect an increase in capital and expenses, primarily
associated with expenditures mandated by the FERC. In November 2001, the FERC
authorized us to commence service on December 1, 2001, but denied our October
2001 request to amend the initial rates, indicating that the

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increase should be filed in a limited Section 4 proceeding. In December 2001, we
filed a limited proceeding with the FERC to increase rates and received an order
accepting the new rates effective March 1, 2002, subject to refund. The increase
in capital over the previously approved level is approximately $43 million. We
have reached a settlement-in-principle with the major intervenor and have filed
an offer of settlement with the FERC that would track certain dredging costs but
would otherwise preserve the filed rates made effective on March 1, 2002. We
have established estimated monthly reserve levels that represent revenues
collected subject to refund.

In May 2000, we filed an application with the FERC to expand our pipeline
system by 336 million cubic feet per day (MMcf/d), at an estimated cost of $141
million, to serve new power generation loads being sited adjacent to our south
system (South System I Expansion). We received a certificate order from the FERC
in March 2001. In July 2001, the FERC approved an amendment to the South System
I Expansion, which reduced its cost slightly. The first phase of the new
facilities was completed and placed in-service in June 2002. The Alabama
Municipal Distributors Group and others filed appeals of the FERC's orders
authorizing this project in the D.C. Circuit Court of Appeals. On July 26, 2002,
we filed a brief in support of the FERC; oral argument is scheduled for November
1, 2002.

In September 2001, the FERC issued a Notice of Proposed Rulemaking (NOPR).
The NOPR proposes to apply the standards of conduct governing the relationship
between interstate pipelines and marketing affiliates to all energy affiliates.
The proposed regulations, if adopted by the FERC, would dictate how we conduct
business and interact with our energy affiliates. In December 2001, we filed
comments with the FERC addressing our concerns with the proposed rules. A public
hearing was held on May 21, 2002, at which interested parties were given an
opportunity to comment further on the NOPR. Following the conference, additional
comments were filed by El Paso's pipelines and others. We cannot predict the
outcome of the NOPR, but adoption of the regulations in substantially the form
proposed would, at a minimum, place additional administrative and operational
burdens on us.

On July 17, 2002, the FERC issued a Notice of Inquiry (NOI) that seeks
comments regarding its policy, established in 1996, of permitting pipelines to
enter into negotiated rate transactions. The FERC is now undertaking a review of
whether negotiated rates should be capped, whether or not a pipeline's "recourse
rate" (its cost of service based rate) continues to serve as a viable
alternative and safeguard against the exercise of alleged pipeline market power,
as well as other issues related to its negotiated rate program. Comments are due
on September 25, 2002, with reply comments due on October 25, 2002. We cannot
predict the outcome of this NOI.

On August 1, 2002, the FERC issued a NOPR requiring that all arrangements
concerning the cash management or money pool arrangements between a FERC
regulated subsidiary and a non-FERC regulated parent must be in writing, and set
forth: the duties and responsibilities of cash management participants and
administrators; the methods of calculating interest and for allocating interest
income and expenses; and the restrictions on deposits or borrowings by money
pool members. The NOPR also requires specified documentation for all deposits
into, borrowings from, interest income from, and interest expenses related to,
these arrangements. Finally, the NOPR proposed that as a condition of
participating in a cash management or money pool arrangement, the FERC regulated
entity must maintain a minimum proprietary capital balance of 30 percent, and
the FERC regulated entity and its parent must maintain investment grade credit
ratings. Comments on the NOPR are due on August 22, 2002. We cannot predict the
outcome of this NOPR.

Also on August 1, 2002, the FERC's Chief Accountant issued, to be effective
immediately, an Accounting Release providing guidance on how jurisdictional
entities should account for money pool arrangements and the types of
documentation that should be maintained for these arrangements. The Accounting
Release sets forth the documentation requirements set forth in the NOPR for
money pool arrangements, but does not address the requirements in the NOPR that
as a condition for participating in money pool arrangements the FERC regulated
entity must maintain a minimum proprietary capital balance of 30 percent and
that the entity and its parent must have investment grade credit ratings.
Requests for rehearing are due on September 3, 2002.

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In October 2001, we filed an application with the FERC to expand our south
system by 360 MMcf/d at an estimated cost of $247 million, to serve existing,
new and expanded gas-fired electric generation facilities. The construction will
be undertaken in two phases, with a target in-service date for the Phase I
facilities of June 1, 2003, and for the Phase II facilities of May 1, 2004. Two
shippers subsequently requested a delay in the commencement of their services
and one shipper requested to reduce service quantity. As a result, in April
2002, we filed an amendment to the certificate application to reflect these
changes. This application remains pending before the FERC.

On May 31, 2002, we filed a certificate application with the FERC to expand
the Elba Island LNG terminal based on a precedent agreement for new firm
terminalling service entered into with Shell NA LNG in December 2001, following
the conclusion of an open season for expansion capacity. This expansion adds a
new marine slip, a fourth storage tank with a capacity of 3.3 billion cubic feet
equivalent, and new pumps and vaporizers that increase the design send out rate
from 446 MMcf/d to 806 MMcf/d and the maximum send out rate from 675 MMcf/d to
1,215 MMcf/d. This application is currently pending before the FERC.

While the outcome of our rates and regulatory matters cannot be predicted
with certainty, based on the information known to date and our existing
accruals, we do not expect the ultimate resolution of these matters to have a
material adverse effect on our financial position, operating results or cash
flows. As new information becomes available or relevant developments occur, we
will review our accruals and make any appropriate adjustments. The impact of
these changes may have a material effect on our results of operations.

Other Matters

As a result of current circumstances surrounding the energy sector, the
creditworthiness of several industry participants has been called into question.
We have taken actions to mitigate our exposure to these participants; however,
should several of these participants file for Chapter 11 bankruptcy protection
and our contracts are not assumed by other counterparties, it could have a
material adverse effect on our financial position, operating results or cash
flows.

4. RELATED PARTY TRANSACTIONS

We participate in El Paso Corporation's cash management program which
matches short-term cash surpluses and needs of its participating affiliates,
thus minimizing total borrowing from outside sources. We had advanced at June
30, 2002 and December 31, 2001, $474 million and $371 million. The market rate
of interest at June 30, 2002 and December 31, 2001 was 1.9% and 2.1%.

At June 30, 2002 and December 31, 2001, we had accounts receivable from
affiliates of $1 million. In addition, we had accounts payable to affiliates of
$4 million at June 30, 2002, and $7 million at December 31, 2001. These balances
arose in the normal course of business.

5. NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

Accounting for Asset Retirement Obligations

In August 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No. 143, Accounting for Asset Retirement Obligations. This statement requires
companies to record a liability for the estimated retirement and removal costs
of assets used in their business. The liability is recorded at its present
value, and the same amount is added to the recorded value of the asset and is
amortized over the asset's remaining useful life. The provisions of SFAS No. 143
are effective for fiscal years beginning after June 15, 2002. We are currently
evaluating the effects of this statement.

Accounting for Costs Associated with Exit or Disposal Activities

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. This statement will require us to recognize
costs associated with exit or disposal activities when they are incurred rather
than when we commit to an exit or disposal plan. Examples of costs covered by
this guidance include lease termination costs, employee severance costs that are
associated with a restructuring,

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discontinued operations, plant closings or other exit or disposal activities.
The provisions of this statement are effective for fiscal years beginning after
December 31, 2002 and will impact any exit or disposal activities initiated
after January 1, 2003.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The information contained in Item 2 updates, and you should read it in
conjunction with, information disclosed in our Annual Report on Form 10-K filed
March 20, 2002, in addition to the financial statements and notes presented in
Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.

RECENT DEVELOPMENTS

As a result of current circumstances surrounding the energy sector, the
creditworthiness of several industry participants has been called into question.
We have taken actions to mitigate our exposure to these participants; however,
should several of these participants file for Chapter 11 bankruptcy protection
and our contracts are not assumed by other counterparties, it could have a
material adverse effect on our financial position, operating results or cash
flows.

RESULTS OF OPERATIONS

Our interstate transmission system serves markets in the southeastern
region of the United States. Our results are relatively stable, but can be
subject to variability from a number of factors, such as weather conditions,
including those conditions that may impact the amount of power produced by
natural gas fired turbines, as well as unforeseen regulatory mandates relating
to environmental or operational issues. Our results can also be impacted by our
ability to market excess natural gas which is influenced by our rate of recovery
for use and efficiencies of the compression equipment. Future revenues may also
be impacted by expansion projects in our service areas, competition by other
pipelines for those expansion needs and regulatory impact on rates. Below are
the operating results and an analysis of these results for the periods ended
June 30:

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(1) BBtu/d means billion British thermal units per day.

In March 2000, the FERC issued an order allowing us to reactivate our Elba
Island LNG facility. The facility received its first LNG shipment in October
2001 and was officially placed in service on December 1, 2001.

Second Quarter 2002 Compared to Second Quarter 2001

Operating revenues for the quarter ended June 30, 2002, were $6 million
higher than the same period in 2001. The increase is primarily due to revenues
from our Elba Island facility which was placed in service in December 2001 and
higher remarketing rates and volumes in the second quarter of 2002 on seasonal
turned-back capacity that resulted from our 2000 rate case settlement. Partially
offsetting the increase were lower prices and volumes on sales under natural gas
purchase contracts in 2002.

Operating expenses for the quarter ended June 30, 2002, were $1 million
lower than the same period in 2001 primarily due to lower purchased natural gas
costs due to lower prices and volumes and lower corporate overhead allocations
in the second quarter of 2002. The decrease was partially offset by higher
operating expenses due to our Elba Island facility being in service in 2002 and
a one-time favorable adjustment in 2001 of expenses related to the sales of the
Sea Robin system and Destin Pipeline Company.

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Six Months Ended 2002 Compared to Six Months Ended 2001

Operating revenues for the six months ended June 30, 2002, were $2 million
lower than the same period in 2001. The decrease is primarily due to lower
prices and volumes in the first half of 2002 on sales under natural gas purchase
contracts and on sales of excess natural gas recoveries. Partially offsetting
the decrease were revenues from our Elba Island facility which was placed in
service in December 2001, higher remarketing rates and volumes in the second
quarter of 2002 on seasonal turned-back capacity that resulted from our 2000
rate case settlement and increased throughput from our interruptible
transportation service in 2002.

Operating expenses for the six months ended June 30, 2002, were $10 million
lower than the same period in 2001 primarily due to lower purchased natural gas
costs due to lower prices and volumes and lower corporate overhead allocations
in the second quarter of 2002. The decrease was partially offset by higher
operating expenses due to our Elba Island facility being in service in 2002 and
a one-time favorable adjustment in 2001 of expenses related to the sales of the
Sea Robin system and Destin Pipeline Company.

Other income for the six months ended June 30, 2002, was $2 million lower
than the same period in 2001 primarily due to a contract termination fee
received in the first quarter of 2001 and higher capitalization of allowance for
funds used during the reactivation of our Elba Island facility during 2001.
Partially offsetting the decrease was increased interest capitalization due to
capital spending for expansion projects in 2002.

INTEREST AND DEBT EXPENSE

Non-Affiliated Interest and Debt Expense

Non-affiliated interest and debt expense for the quarter and six months
ended June 30, 2002, was $3 million and $5 million higher than the same periods
in 2001 due to increased net long-term borrowings in 2002.

Affiliated Interest Income

Affiliated interest income for the quarter and six months ended June 30,
2002, was $3 million and $6 million lower than the same periods in 2001
primarily due to lower short-term interest rates in 2002 on average advances to
El Paso under our cash management program.

INCOME TAXES

Income tax expense for the quarters ended June 30, 2002 and 2001, was $14
million and $15 million, resulting in effective tax rates of 38 percent and 39
percent. Income tax expense for the six months ended June 30, 2002 and 2001, was
$30 million and $33 million, resulting in effective tax rates of 38 percent for
both periods. Our effective tax rates were different than the statutory rate of
35 percent in all periods primarily due to state income taxes.

COMMITMENTS AND CONTINGENCIES

See Item 1, Financial Statements, Note 3, which is incorporated herein by
reference.

NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

See Item 1, Financial Statements, Note 5, which is incorporated herein by
reference.

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CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

This report contains or incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Where any forward-looking statement includes a statement of the
assumptions or bases underlying the forward-looking statement, we caution that,
while we believe these assumptions or bases to be reasonable and to be made in
good faith, assumed facts or bases almost always vary from the actual results,
and the differences between assumed facts or bases and actual results can be
material, depending upon the circumstances. Where, in any forward-looking
statement, we or our management express an expectation or belief as to future
results, that expectation or belief is expressed in good faith and is believed
to have a reasonable basis. We cannot assure you, however, that the statement of
expectation or belief will result or be achieved or accomplished. The words
"believe," "expect," "estimate," "anticipate" and similar expressions will
generally identify forward-looking statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This information updates, and you should read it in conjunction with,
information disclosed in Part II, Item 7A in our Annual Report on Form 10-K for
the year ended December 31, 2001, in addition to the information presented in
Items 1 and 2 of this Quarterly Report on Form 10-Q.

There are no material changes in our quantitative and qualitative
disclosures about market risks from those reported in our Annual Report on Form
10-K for the year ended December 31, 2001.

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PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Part I, Item 1, Financial Statements, Note 3, which is incorporated
herein by reference.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a. Exhibits

Each exhibit identified below is filed as a part of this report. Exhibits
not incorporated by reference to a prior filing are designated by an "*"; all
exhibits not so designated are incorporated herein by reference to a prior
filing as indicated.

-- Certification of Chairman of the Board (Principal
*99.A Executive Officer) pursuant to 18 U.S.C. sec. 1350 as
adopted pursuant to sec. 906 of the Sarbanes-Oxley Act of
2002.
-- Certification of Chief Financial Officer pursuant to 18
*99.B U.S.C. sec. 1350 as adopted pursuant to sec. 906 of the
Sarbanes-Oxley Act of 2002.

Undertaking

We hereby undertake, pursuant to Regulation S-K, Item 601(b),
paragraph (4)(iii), to furnish to the U.S. Securities and Exchange
Commission, upon request, all constituent instruments defining the rights
of holders of our long-term debt not filed herewith for the reason that the
total amount of securities authorized under any of such instruments does
not exceed 10 percent of our total consolidated assets.

b. Reports on Form 8-K

None.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

SOUTHERN NATURAL GAS COMPANY

Date: August 13, 2002 /s/ JOHN W. SOMERHALDER II
------------------------------------
John W. Somerhalder II
Chairman of the Board and Director
(Principal Executive Officer)

Date: August 13, 2002 /s/ GREG G. GRUBER
------------------------------------
Greg G. Gruber
Senior Vice President,
Chief Financial Officer and
Treasurer
(Principal Financial and Accounting
Officer)

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EXHIBIT INDEX

Each exhibit identified below is filed as a part of this report. Exhibits
not incorporated by reference to a prior filing are designated by an "*"; all
exhibits not so designated are incorporated herein by reference to a prior
filing as indicated.

-- Certification of Chairman of the Board (Principal
*99.A Executive Officer) pursuant to 18 U.S.C. sec. 1350 as
adopted pursuant to sec. 906 of the Sarbanes-Oxley Act of
2002.
-- Certification of Chief Financial Officer pursuant to 18
*99.B U.S.C. sec. 1350 as adopted pursuant to sec. 906 of the
Sarbanes-Oxley Act of 2002.