UNITEDTable STATESof SECURITIES AND EXCHANGE COMMISSIONContents

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

~~________________~~Washington, D.C. 20549

Form 10-Q

(Mark One)

R	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2011
	OR
£	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~Commission~~For ~~File~~the ~~Number~~quarterly ~~1-2745~~period ended June 30, 2011

~~________________~~OR

~~Southern~~o ~~Natural~~TRANSITION ~~Gas~~REPORT ~~Company~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~(Exact~~For ~~Name~~the oftransition ~~Registrant~~period ~~as Specified in Its Charter)~~from to

Delaware	63-0196650
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification No.)
El Paso Building
1001 Louisiana Street
Houston, Texas	77002
(Address of Principal Executive Offices)	(Zip Code)

Commission File Number 1-2745

~~Telephone~~Southern ~~Number:~~Natural ~~(713)~~Gas ~~420-2600~~Company, L.L.C.

~~Indicate by check mark whether the registrant~~ (1)Exact ~~has~~Name ~~filed all reports required to be filed by Section 13 or 15(d)~~ of ~~the~~Registrant ~~Securities~~as ~~Exchange~~Specified ~~Act~~in ofIts ~~1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports~~Charter)~~, and (2) has been subject to such filing requirements for the past 90 days. Yes R No £~~

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes £ No £


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

El Paso Building 1001 Louisiana Street Houston, Texas (Address of Principal Executive Offices)		77002 (Zip Code)

~~Indicate~~Telephone byNumber: ~~check mark whether the registrant is a large accelerated filer, an accelerated filer,~~(713) ~~a non~~420-~~accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.~~2600

~~Large~~ Indicate ~~accelerated~~by ~~filer~~check mark whether the registrant (1) ~~£ Accelerated~~has ~~filer~~filed all reports required to be filed by Section ~~£ Non-accelerated~~13 ~~filer~~or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 ~~R Smaller~~months ~~reporting~~(or for ~~company~~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 þ No o

~~(Do~~ Indicate ~~not~~by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if aany, ~~smaller~~every ~~reporting~~Interactive ~~company~~Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a ~~shell~~large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. ~~(as~~See ~~defined~~the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act). ~~Yes £ No R~~

~~SOUTHERN~~Large ~~NATURAL~~accelerated ~~GAS~~filer ~~COMPANY~~o Accelerated filer o Non-accelerated filer þ (Do not check if a smaller reporting company) Smaller reporting company o

~~TABLE~~ Indicate OFby ~~CONTENTS~~check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Caption		Page
PART I — Financial Information
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4.	Controls and Procedures	12
PART II — Other Information
Item 1.	Legal Proceedings	13
Item 1A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	(Removed and Reserved)	13
Item 5.	Other Information	13
Item 6.	Exhibits	14
	Signatures	15

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

~~Below~~SOUTHERN isNATURAL aGAS ~~list of terms that are common to our industry and used throughout this document: /d = per day BBtu = billion British thermal units When we refer to “us”~~COMPANY, ~~“we”,~~L.L.C. TABLE ~~“our”,~~OF ~~or “ours”, we are describing Southern Natural Gas Company and/or our subsidiaries.~~CONTENTS


Caption	Page


PART I — Financial Information

Item 1. Financial Statements		1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		8
Item 3. Quantitative and Qualitative Disclosures About Market Risk		*
Item 4. Controls and Procedures		11

PART II — Other Information

Item 1. Legal Proceedings		12
Item 1A. Risk Factors		12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		*
Item 3. Defaults Upon Senior Securities		*
Item 4. (Removed and Reserved)		12
Item 5. Other Information		12
Item 6. Exhibits		13
Signatures		14
EX-3.A
EX-3.B
EX-12
EX-31.A
EX-31.B
EX-32.A
EX-32.B
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

~~Table~~* ofWe ~~Contents~~have not included a response to this item in this document since no response is required pursuant to the reduced disclosure format permitted by General Instruction H to Form 10-Q.

~~PART I —~~ Below ~~FINANCIAL~~is ~~INFORMATION~~a list of terms that are common to our industry and used throughout this document:

~~Item 1. Financial~~/d ~~Statements~~= per day BBtu = billion British thermal units

~~SOUTHERN~~When ~~NATURAL~~we ~~GAS~~refer ~~COMPANY~~to “us”, “we”, “our”, or “ours”, we are describing Southern Natural Gas Company, L.L.C. and/or our subsidiaries.

~~CONDENSED CONSOLIDATED STATEMENTS OF INCOME~~i

(InTable millions)of Contents

~~(Unaudited)~~PART I — FINANCIAL INFORMATION

	Quarter Ended March 31,
	2011			2010
Operating revenues	$	145		$	145
Operating expenses
Operation and maintenance		34			37
Depreciation and amortization		15			15
Taxes, other than income taxes		8			7
		57			59
Operating income		88			86
Earnings from unconsolidated affiliate		4			4
Other income, net		2			1
Interest and debt expense		(16	)		(16	)
Affiliated interest income, net		—			1
Net income	$	78		$	76

Item 1. Financial Statements

~~See~~SOUTHERN ~~accompanying~~NATURAL ~~notes~~GAS COMPANY, L.L.C. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In millions) (Unaudited)


	Quarter Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Operating revenues	$	133		$	131		$	278		$	276

Operating expenses
Operation and maintenance		38			38			72			75
Depreciation and amortization		16			14			31			29
Taxes, other than income taxes		7			7			15			14

		61			59			118			118

Operating income		72			72			160			158
Earnings from unconsolidated affiliate		3			3			7			7
Other income, net		2			1			4			2
Interest and debt expense		(16	)		(16	)		(32	)		(32	)
Affiliated interest income, net		—			—			—			1

Net income	$	61		$	60		$	139		$	136

~~Table~~See ofaccompanying ~~Contents~~notes.

~~SOUTHERN NATURAL GAS COMPANY~~1

CONDENSEDTable CONSOLIDATEDof BALANCE SHEETSContents

SOUTHERN NATURAL GAS COMPANY, L.L.C. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited)

(Unaudited)


	June 30,		December 31,
	2011		2010
ASSETS
Current assets
Cash and cash equivalents	$	2	$	4
Accounts and note receivable
Customer, net of allowance		2		3
Affiliates		81		—
Other		18		26
Materials and supplies		16		16
Other		16		14

Total current assets		135		63

Property, plant and equipment, at cost		3,951		3,885
Less accumulated depreciation and amortization		1,393		1,390

Total property, plant and equipment, net		2,558		2,495

Other non-current assets
Investment in unconsolidated affiliate		58		56
Note receivable from affiliate		218		—
Other		70		73

		346		129

Total assets	$	3,039	$	2,687


LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities
Accounts and note payable
Trade	$	21	$	25
Affiliates		14		28
Other		22		31
Taxes payable		14		13
Accrued interest		19		18
Contractual deposits		8		6
Other		4		1

Total current liabilities		102		122

Long-term debt		1,210		910

Other non-current liabilities		31		31


Commitments and contingencies (Note 5)
Partners’ capital		1,696		1,624

Total liabilities and partners’ capital	$	3,039	$	2,687

	March 31, 2011		December 31, 2010
ASSETS
Current assets
Cash and cash equivalents	$	6	$	4
Accounts and note receivable
Customer		10		3
Affiliates		2		—
Other		21		26
Materials and supplies		16		16
Regulatory assets		18		14
Total current assets		73		63
Property, plant and equipment, at cost		3,903		3,885
Less accumulated depreciation and amortization		1,385		1,390
Total property, plant and equipment, net		2,518		2,495
Other assets
Investment in unconsolidated affiliate		59		56
Other		73		73
		132		129
Total assets	$	2,723	$	2,687
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities
Accounts and note payable
Trade	$	20	$	25
Affiliates		12		28
Other		35		31
Taxes payable		7		13
Accrued interest		18		18
Contractual deposits		9		6
Asset retirement obligations		—		1
Total current liabilities		101		122
Long-term debt		910		910
Other liabilities		32		31
Commitments and contingencies (Note 4)
Partners’ capital		1,680		1,624
Total liabilities and partners’ capital	$	2,723	$	2,687

See accompanying notes.

~~See accompanying notes.~~2

2Table of Contents

~~Table~~SOUTHERN ofNATURAL ~~Contents~~GAS COMPANY, L.L.C. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)

SOUTHERN NATURAL GAS COMPANY


	Six Months Ended
	June 30,
	2011			2010
Cash flows from operating activities
Net income	$	139		$	136
Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization		31			29
Earnings from unconsolidated affiliate, adjusted for cash distributions		(2	)		—
Other non-cash income items		(2	)		—
Asset and liability changes		10			(21	)

Net cash provided by operating activities		176			144

Cash flows from investing activities
Capital expenditures		(100	)		(51	)
Net change in note receivable from affiliate		(298	)		69
Acquisition		—			(18	)
Proceeds from the sale of assets		—			8
Other		2			2

Net cash provided by (used in) investing activities		(396	)		10

Cash flows from financing activities
Net change in note payable to affiliate		(12	)		—
Net proceeds from issuance of debt		297			—
Contributions from partners		60			—
Distributions to partners		(127	)		(151	)

Net cash provided by (used in) financing activities		218			(151	)

Net change in cash and cash equivalents		(2	)		3
Cash and cash equivalents
Beginning of period		4			—

End of period	$	2		$	3

~~CONDENSED~~See ~~CONSOLIDATED~~accompanying ~~STATEMENTS OF CASH FLOWS~~notes.

~~(In millions)~~3

(Unaudited)Table of Contents

	Quarter Ended March 31,
	2011			2010
Cash flows from operating activities
Net income	$	78		$	76
Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization		15			15
Earnings from unconsolidated affiliate, adjusted for cash distributions		(3	)		(1	)
Other non-cash income items		(1	)		—
Asset and liability changes		(1	)		2
Net cash provided by operating activities		88			92
Cash flows from investing activities
Capital expenditures		(51	)		(18	)
Net change in note receivable from affiliate		(4	)		23
Acquisition		—			(18	)
Proceeds from the sale of assets		—			8
Other		3			—
Net cash used in investing activities		(52	)		(5	)
Cash flows from financing activities
Net change in note payable to affiliate		(12	)		—
Contributions from partners		25			—
Distributions to partners		(47	)		(83	)
Net cash used in financing activities		(34	)		(83	)
Net change in cash and cash equivalents		2			4
Cash and cash equivalents
Beginning of period		4			—
End of period	$	6		$	4

SOUTHERN NATURAL GAS COMPANY, L.L.C.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

~~See~~1. ~~accompanying~~Basis ~~notes.~~of Presentation and Significant Accounting Policies

3Basis of Presentation

~~Table~~ We prepared this Quarterly Report on Form 10-Q under the rules and regulations of ~~Contents~~the United States Securities and Exchange Commission. As an interim period filing presented using a condensed format, it does not include all of the disclosures required by U.S. generally accepted accounting principles, and should be read along with our 2010 Annual Report on Form 10-K. The financial statements as of June 30, 2011, and for the quarters and six months ended June 30, 2011 and 2010, are unaudited. The condensed consolidated balance sheet as of December 31, 2010 was derived from the audited balance sheet filed in our 2010 Annual Report on Form 10-K. In our opinion, we have made adjustments, all of which are of a normal, recurring nature, to fairly present our interim period results. Due to the seasonal nature of our business, information for interim periods may not be indicative of our operating results for the entire year. Our disclosures in this Form 10-Q are an update to those provided in our 2010 Annual Report on Form 10-K.

~~SOUTHERN~~ During ~~NATURAL~~2011, ~~GAS~~El ~~COMPANY~~Paso Pipeline Partners, L.P. (EPB) acquired the remaining 40 percent interest (25 percent in March and 15 percent in June) in us from El Paso Corporation (El Paso) and we became an indirect wholly owned subsidiary of EPB.

~~NOTES~~ Effective TOAugust 1, ~~CONDENSED~~2011, ~~CONSOLIDATED~~we ~~FINANCIAL~~converted ~~STATEMENTS~~our legal structure to a limited liability company and changed our name to Southern Natural Gas Company, L.L.C.

~~(Unaudited)~~Significant Accounting Policies

~~1. Basis~~ There ofwere ~~Presentation~~no changes in the significant accounting policies described in our 2010 Annual Report on Form 10-K and ~~Significant~~no ~~Accounting~~significant ~~Policies~~accounting pronouncements issued but not yet adopted as of June 30, 2011.

~~Basis~~2. ofAcquisition ~~Presentation~~and Divestiture

We In ~~prepared~~2010, ~~this~~we ~~Quarterly~~purchased ~~Report~~certain onpipeline ~~Form~~assets ~~10-Q~~from ~~under~~Elba ~~the~~Express ~~rules and regulations of the United States Securities and Exchange Commission. As an interim period filing presented using a condensed format~~Company, ~~it does not include all of the disclosures required by U~~L.SL.C. ~~generally accepted accounting principles~~(Elba Express), ~~and you should read this report along with~~ our ~~2010 Annual Report on Form 10-K. The financial statements as of March 31~~affiliate, ~~2011, and~~ for ~~the~~$18 million ~~quarters ended March 31, 2011~~ and ~~2010,~~sold ~~are~~certain ~~unaudited.~~pipeline ~~The~~assets ~~condensed~~to ~~consolidated~~Elba ~~balance~~Express ~~sheet~~for asnet proceeds of ~~December~~$8 ~~31, 2010,~~million. ~~was~~We ~~derived~~recorded ~~from~~both the ~~audited~~purchase ~~balance~~and ~~sheet~~sale ~~filed~~at intheir ~~our~~historical ~~2010~~cost ~~Annual Report on Form 10-K. In our opinion~~and accordingly, we ~~have~~recognized ~~made~~no ~~adjustments,~~gain ~~all~~or ofloss which are of a normal, recurring nature to fairly present our interim period results. Due to the seasonal nature of our business, information for interim periods may not be indicative of our operating results for the entire year. Our disclosures in this Form 10-Q are an update to those provided in our 2010 Annual Report on ~~Form~~these ~~10-K~~transactions.

~~In March 2011, El Paso Pipeline Partners, L~~3.P. ~~(EPB)~~Financial acquired an additional 25 percent ownership interest in us from El Paso Corporation (El Paso). The acquisition increased EPB’s interest in us to 85 percent with El Paso retaining the remaining 15 percent.Instruments

~~Significant~~ At ~~Accounting~~June 30, ~~Policies~~2011 and December 31, 2010, the carrying amounts of cash and cash equivalents and trade receivables and payables represent fair value because of the short-term nature of these instruments. At June 30, 2011, we had an interest bearing note receivable from EPB of approximately $298 million. At December 31, 2010, this note carried a payable balance to EPB of approximately $12 million. The interest rate on this note is variable and was 2.2% and 0.8% at June 30, 2011 and December 31, 2010. While we are exposed to changes in interest income or expense based on changes to the variable interest rate, the fair value of this note approximates its carrying value due to the note being due or payable on demand and the market-based nature of the interest rate.

~~There~~ In ~~were~~addition, ~~no changes in~~ the ~~significant~~carrying ~~accounting~~amounts ~~policies~~of ~~described in~~ our ~~2010~~long-term ~~Annual~~debt ~~Report~~and ontheir ~~Form~~estimated ~~10-K~~fair ~~and~~values, nowhich are ~~significant~~based ~~accounting~~on ~~pronouncements~~quoted ~~issued~~market ~~but~~prices ~~not~~for ~~yet~~the ~~adopted~~same asor ofsimilar ~~March 31~~issues, ~~2011.~~are as follows:

2. Acquisition / Divestiture


	June 30, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(In millions)
Long-term debt	$	1,210	$	1,368	$	910	$	984

During the first quarter of 2010, we purchased certain pipeline assets from Elba Express Company, L.L.C. (Elba Express), our affiliate, for $18 million and sold certain pipeline assets to Elba Express for net proceeds of $8 million. We recorded both the purchase and sale at their historical cost and accordingly, we recognized no gain or loss on these transactions.4

3.Table Financialof InstrumentsContents

At March 31, 2011 and December 31, 2010, the carrying amounts of cash and cash equivalents and trade receivables and payables represent fair value because of the short-term nature of these instruments. At March 31, 2011, we had an interest bearing note receivable from EPB of approximately $4 ~~million~~. At December 31, 2010, this note carried a payable balance to EPB of approximately $12 million. The interest rate on this note is variable and was 0.8% at March 31, 2011 and December 31, 2010. While we are exposed to changes in interest income or expense based on changes to the variable interest rate, the fair value of this note approximates its carrying value due to the note being due on demand and the market-based nature of the interest rate.Debt

In ~~addition~~June 2011, ~~the~~we ~~carrying~~and ~~amounts~~our ofwholly ~~our~~owned ~~long-term~~subsidiary, ~~debt~~Southern ~~and~~Natural ~~their~~Issuing ~~estimated~~Corporation ~~fair~~(SNIC) issued ~~values~~$300 million aggregate principal amount of senior unsecured notes at 4.4 percent, ~~which~~due ~~are~~June 15, ~~based~~2021. onThe ~~quoted~~net ~~market~~proceeds ~~prices~~of $297 million from this offering will be used for ~~the~~growth ~~same~~capital expenditures orand ~~similar~~general ~~issues~~corporate purposes. The indenture governing these notes contains restrictions and covenants, none of which are asmore ~~follows:~~restrictive than those of our existing debt covenants.

	March 31, 2011				December 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Long-term debt	$	910	$	1,031	$	910	$	984

SNIC as the co-issuer of the debt securities is jointly and severally liable for the obligation. SNIC has no material assets, operations, revenues or cash flows other than those related to its service as a co-issuer of our debt securities. Accordingly, it has no ability to service obligations on our debt securities.

45. Commitments and Contingencies

~~Table~~Legal ~~of Contents~~Proceedings

4 We and our affiliates are named defendants in numerous legal proceedings and claims that arise in the ordinary course of our business. ~~Commitments~~ For each of these matters, we evaluate the merits of the case or claim, our exposure to the matter, possible legal or settlement strategies and ~~Contingencies~~the likelihood of an unfavorable outcome. If we determine that an unfavorable outcome is probable and can be estimated, we establish the necessary accruals. While the outcome of these matters cannot be predicted with certainty, and there are still uncertainties related to the costs we may incur, based upon our evaluation and experience to date, we believe we have established appropriate reserves for these matters. It is possible, however, that new information or future developments could require us to reassess our potential exposure related to these matters and adjust our accruals accordingly, and these adjustments could be material. As of June 30, 2011, we had approximately $2 million accrued for all of our outstanding legal proceedings.

~~Legal~~Environmental ~~Proceedings~~Matters

We ~~and our affiliates~~ are ~~named~~subject ~~defendants~~to infederal, ~~numerous~~state ~~legal proceedings~~ and ~~claims~~local ~~that~~laws ~~arise~~and inregulations ~~the~~governing ~~ordinary~~environmental quality ~~course~~and ofpollution ~~our business~~control. ~~For~~These ~~each~~laws ofand ~~these~~regulations ~~matters,~~require weus ~~evaluate the merits of the case or claim, our exposure~~ to ~~the~~remove ~~matter, possible legal~~ or ~~settlement~~remedy ~~strategies and~~ the ~~likelihood~~ effect of ~~an unfavorable outcome. If we determine that an unfavorable outcome is probable and can be estimated, we establish~~ the ~~necessary~~disposal ~~accruals.~~or ~~While~~release ~~the outcome~~ of ~~these~~specified ~~matters~~substances ~~cannot~~at becurrent ~~predicted with certainty,~~ and ~~there~~former ~~are~~operating ~~still uncertainties related to the costs we may incur, based upon our evaluation and experience to date, we believe we have established appropriate reserves for these matters~~sites. ItAt ~~is possible~~June 30, ~~however~~2011, ~~that new information or future developments could require us to reassess~~ our ~~potential~~accrual ~~exposure~~was ~~related~~less tothan ~~these matters and adjust our accruals accordingly, and these adjustments could be material. As of March 31, 2011, we had approximately~~ $2 1 million ~~accrued~~ for ~~all of~~ our ~~outstanding~~environmental ~~legal proceedings~~matters.

~~Environmental~~ Our ~~Matters~~environmental remediation projects are in various stages of completion. Our recorded liabilities reflect our current estimates of amounts we will spend to remediate these sites. However, depending on the stage of completion or assessment, the ultimate extent of contamination or remediation required may not be known. As additional assessments occur or remediation efforts continue, we may incur additional liabilities.

We Superfund Matters. Included in our recorded environmental liabilities are ~~subject~~projects towhere ~~federal,~~we have ~~state~~received ~~and~~notice ~~local~~that ~~laws~~we ~~and~~have ~~regulations~~been ~~governing~~designated ~~environmental~~or ~~quality~~could ~~and~~be ~~pollution~~designated ~~control.~~as ~~These~~a ~~laws~~Potentially Responsible Party (PRP) under the Comprehensive Environmental Response, Compensation and ~~regulations~~Liability Act ~~require~~(CERCLA), uscommonly toknown ~~remove~~as Superfund, or ~~remedy~~state ~~the~~equivalents ~~effect~~for ofone ~~the~~active ~~disposal~~site. orLiability under ~~release~~the offederal ~~specified~~CERCLA ~~substances~~statute atmay ~~current~~be joint and ~~former~~several, ~~operating~~meaning ~~sites.~~that Atwe ~~March~~could ~~31,~~be ~~2011,~~required to pay in excess of our ~~accrual~~pro ~~was~~rata ~~less~~share ~~than~~of $1remediation ~~million~~costs. ~~for~~We ~~our~~consider ~~environmental~~the ~~matters~~financial strength of other PRPs in estimating our liabilities.

~~Our~~ We ~~environmental~~expect ~~remediation~~to ~~projects~~make ~~are~~capital inexpenditures ~~various~~for ~~stages~~environmental matters of ~~completion.~~approximately ~~Our~~$2 million in ~~recorded~~the ~~liabilities~~aggregate ~~reflect~~for ~~our~~the ~~current~~remainder ~~estimates~~ of ~~amounts~~2011 wethrough ~~will~~2015, ~~spend~~including tocapital ~~remediate~~expenditures ~~these~~associated with ~~sites. However, depending on~~ the ~~stage~~impact of ~~completion~~the orEnvironmental ~~assessment,~~Protection ~~the~~Agency ~~ultimate~~rule ~~extent~~on emissions of ~~contamination~~hazardous orair pollutants ~~remediation~~from ~~required~~reciprocating ~~may~~internal ~~not~~combustion beengines ~~known.~~which Asare ~~additional~~subject ~~assessments~~to ~~occur~~regulations orwith which ~~remediation~~we ~~efforts~~have ~~continue,~~to webe ~~may~~in ~~incur~~compliance ~~additional~~by ~~liabilities~~October 2013.

~~Superfund~~ It ~~Matters. Included~~is inpossible that new information or future developments could require us to reassess our potential ~~recorded~~exposure related to environmental ~~liabilities~~matters. ~~are~~We ~~projects~~may ~~where~~incur wesignificant ~~have~~costs ~~received~~and ~~notice~~liabilities in ~~that~~order weto ~~have~~comply ~~been~~with ~~designated~~existing orenvironmental ~~could~~laws beand ~~designated~~regulations. asIt ais ~~Potentially~~also ~~Responsible~~possible ~~Party~~that ~~(PRP)~~other developments, ~~under~~such ~~the~~as ~~Comprehensive~~increasingly ~~Environmental~~strict ~~Response~~environmental laws, ~~Compensation~~regulations and ~~Liability~~orders ~~Act~~of ~~(CERCLA)~~regulatory agencies, ~~commonly~~as ~~known~~well as ~~Superfund,~~claims for damages to property and the environment or ~~state~~injuries ~~equivalents~~to ~~for~~other persons ~~one~~resulting ~~active~~from ~~site.~~our ~~Liability~~current ~~under~~or ~~the~~past ~~federal~~operations, ~~CERCLA~~could ~~statute~~result ~~may~~in besubstantial ~~joint~~costs and liabilities ~~several,~~in ~~meaning~~the ~~that~~future. weAs ~~could~~this beinformation ~~required~~becomes toavailable, ~~pay~~or inother ~~excess~~relevant ofdevelopments occur, we will adjust our ~~pro~~accrual ~~rata~~amounts ~~share~~accordingly. ofWhile ~~remediation~~there ~~costs.~~are Westill ~~consider~~uncertainties related to the ultimate ~~financial~~costs ~~strength~~we ofmay ~~other~~incur, ~~PRPs~~based inupon ~~estimating~~our evaluation and experience to date, we believe our reserves ~~liabilities~~are adequate.

We expect to make capital expenditures for environmental matters of approximately $2 million in the aggregate for the remainder of 2011 through 2015, including capital expenditures associated with the impact of the Environmental Protection Agency rule on emissions of hazardous air pollutants from reciprocating internal combustion engines which are subject to regulations with which we have to be in compliance by October 2013.5

ItTable is possible that new information or future developments could require us to reassess our potential exposure related to environmental matters. We may incur significant costs and liabilities in order to comply with existing environmental laws and regulations. It is also possible that other developments, such as increasingly strict environmental laws, regulations and orders of regulatory agencies, as well as claims for damages to property and the environment or injuries to other persons resulting from our current or past operations, could result in substantial costs and liabilities in the future. As this information becomes available, or other relevant developments occur, we will adjust our accrual amounts accordingly. While there are still uncertainties related to the ultimate costs we may incur, based upon our evaluation and experience to date, we believe our reserves are adequate.Contents

Other Commitment

During 2009, we entered into a $57 million letter of credit associated with our estimated construction cost related to the Southeast Supply Header project. As invoices are paid under the contract, we are able to reduce the value of the letter of credit. At ~~March 31~~June 30, 2011, the letter of credit has been reduced to approximately $18 million.

56. Accounts Receivable Sales Program

~~Table~~ We participate in an accounts receivable sales program where we sell receivables in their entirety to a third party financial institution (through a wholly-owned special purpose entity). The sale of ~~Contents~~these accounts receivable (which are short-term assets that generally settle within 60 days) qualify for sale accounting. The third party financial institution involved in our accounts receivable sales program acquires interests in various financial assets and issues commercial paper to fund those acquisitions. We do not consolidate the third party financial institution because we do not have the power to control, direct, or exert significant influence over its overall activities since our receivables do not comprise a significant portion of its operations.

5 In connection with our accounts receivable sales, we receive a portion of the sales proceeds up front and receive an additional amount upon the collection of the underlying receivables (which we refer to as a deferred purchase price). ~~Accounts~~Our ~~Receivable~~ability ~~Sales~~to ~~Program~~recover the deferred purchase price is based solely on the collection of the underlying receivables. The table below contains information related to our accounts receivable sales program.

We participate in an accounts receivable sales program where we sell receivables in their entirety to a third party financial institution (through a wholly-owned special purpose entity). The sale of these accounts receivable (which are short-term assets that generally settle within 60 days) qualify for sale accounting. The third party financial institution involved in our accounts receivable sales program acquires interests in various financial assets and issues commercial paper to fund those acquisitions. We do not consolidate the third party financial institution because we do not have the power to control, direct, or exert significant influence over its overall activities since our receivables do not comprise a significant portion of its operations.


	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Accounts receivable sold to the third-party financial institution⁽¹⁾	$	138	$	137	$	300	$	283
Cash received for accounts receivable sold under the program		88		88		184		211
Deferred purchase price related to accounts receivable sold		50		49		116		72
Cash received related to the deferred purchase price		53		52		126		109
Amount paid in conjunction with terminated programs⁽²⁾		—		—		—		30

In connection with our accounts receivable sales, we receive a portion of the sales proceeds up front and receive an additional amount upon the collection of the underlying receivables (which we refer to as a deferred purchase price). Our ability to recover the deferred purchase price is based solely on the collection of the underlying receivables. The table below contains information related to our accounts receivable sales program.


⁽¹⁾		During the quarters and six months ended June 30, 2011 and 2010, losses recognized on the sale of accounts receivable were immaterial.

⁽²⁾		In January 2010, we terminated our previous accounts receivable sales program and paid $30 million to acquire the related senior interests in certain receivables under that program. See our 2010 Annual Report on Form 10-K for further information.

	Quarter Ended March 31,
	June 30,		December 31,
	2011		2010
	(In millions)
Accounts receivable sold to the third-party financial institution (1)	$	162	$	146
Accounts receivable sold and held by third-party financial institution	$	47	$	56
Cash received for accounts receivable sold under the program		96		123
Uncollected deferred purchase price related to accounts receivable sold(1)		16		26
Deferred purchase price related to accounts receivable sold		66		23
Cash received related to the deferred purchase price		73		57
Amount paid in conjunction with terminated program (2)		—		30

~~____________~~(1) Initially recorded at an amount which approximates its fair value using observable inputs other than quoted prices in active markets.

~~(1) During~~ The deferred purchase price related to the ~~quarters~~accounts ~~ended~~receivable ~~March~~sold ~~31,~~is ~~2011~~reflected as other accounts receivable on our balance sheet. Because the cash received up front and ~~2010,~~the ~~losses~~deferred purchase ~~recognized~~price onrelate to the sale or ultimate collection of the underlying receivables, and are not subject to significant other risks given their short term nature, we reflect all cash flows under the accounts receivable sales program as operating cash flows on our statement of cash flows. Under the accounts receivable sales program, we service the underlying receivables for a fee. The fair value of this servicing agreement, as well as the fees earned, were ~~immaterial~~not material to our financial statements for the quarters and six months ended June 30, 2011 and 2010.

~~(2) In~~7. ~~January~~Investment ~~2010,~~in weUnconsolidated ~~terminated~~Affiliate ~~our previous accounts receivable sales program~~ and ~~paid~~Transactions ~~$30~~with ~~million to acquire the related senior interests in certain receivables under that program. See our 2010 Annual Report on Form 10-K for further information.~~Affiliates

	March 31,		December 31,
	2011		2010
	(In millions)
Accounts receivable sold and held by third-party financial institution	$	50	$	56
Uncollected deferred purchase price related to accounts receivable sold (1)		19		26

Investment in Unconsolidated Affiliate

~~____________~~ We have a 50 percent ownership interest in Bear Creek Storage Company, L.L.C. (Bear Creek), a joint venture with Tennessee Gas Pipeline Company, our affiliate. For the six months ended June 30, 2011 and 2010, we received $5 million and $7 million in cash distributions from Bear Creek.

~~(1) Initially recorded at an amount which approximates its fair value using observable inputs other than quoted prices in active markets.~~6

TheTable deferred purchase price related to the accounts receivable sold is reflected as other accounts receivable on our balance sheet. Because the cash received up front and the deferred purchase price relate to the sale or ultimate collection of the underlying receivables, and are not subject to significant other risks given their short term nature, we reflect all cash flows under the accounts receivable sales program as operating cash flows on our statement of cash flows. Under the accounts receivable sales program, we service the underlying receivables for a fee. The fair value of this servicing agreement, as well as the fees earned, were not material to our financial statements for the quarters ended March 31, 2011 and 2010.Contents

~~6. Investment~~ Summarized infinancial ~~Unconsolidated~~information ~~Affiliate~~for ~~and~~our ~~Transactions~~proportionate ~~with~~share ~~Affiliates~~of Bear Creek is presented as follows:

Investment in Unconsolidated Affiliate


	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Operating results data:
Operating revenues	$	5	$	5	$	10	$	10
Operating expenses		2		2		3		3
Income from continuing operations and net income		3		3		7		7

WeTransactions ~~have a 50 percent ownership interest in Bear Creek Storage Company, L.L.C. (Bear Creek), a joint venture~~ with ~~Tennessee Gas Pipeline Company, our affiliate. For the quarters ended March 31, 2011 and 2010, we received $1 million and $3 million in cash distributions from Bear Creek.~~Affiliates

6 EPB Acquisition. During 2011, EPB acquired the remaining 40 percent interest (25 percent in March and 15 percent in June) in us from El Paso and we became an indirect wholly owned subsidiary of EPB.

~~Table~~ Distributions and Contributions. We are required to make distributions of ~~Contents~~available cash as defined in our partnership and limited liability company agreements on a quarterly basis. During the six months ended June 30, 2011 and 2010, we paid cash distributions of approximately $127 million and $151 million to our partners. In addition, in July 2011, we paid cash distributions to our partners of approximately $61 million. During the six months ended June 30, 2011, we received cash contributions of approximately $60 million from our partners to fund our expansion projects.

~~Summarized~~ Cash ~~financial~~Management ~~information~~Program. ~~for~~We ~~our~~participate ~~proportionate~~in ~~share~~EPB’s cash management program which matches short-term cash surpluses and needs of ~~Bear~~participating ~~Creek~~affiliates, ~~for~~thus minimizing total borrowings from outside sources. EPB uses the ~~quarters~~cash ~~ended~~management ~~March~~program to settle intercompany transactions between participating affiliates. At June 30, 2011, we had a note receivable from EPB of approximately $298 million. We classified $80 million of this receivable as current on our balance sheet at June 30, 2011 based on the net amount we anticipate using in the next twelve months considering available cash sources and needs. At December 31, is2010 ~~presented~~this note carried a payable balance to EPB of approximately $12 million which was classified as ~~follows:~~current on our balance sheet. The interest rate on this note is variable and was 2.2% and 0.8% at June 30, 2011 and December 31, 2010.

	2011		2010
	(In millions)
Operating results data:
Operating revenues	$	5	$	5
Operating expenses		1		1
Income from continuing operations and net income		4		4

Affiliate Revenues and Expenses. We enter into transactions with our affiliates within the ordinary course of business. For a further discussion of our affiliated transactions, see our 2010 Annual Report on Form 10-K. The following table shows revenues and charges from our affiliates:

Transactions with Affiliates


	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Revenues	$	2	$	2	$	4	$	4
Operation and maintenance expenses		29		29		56		59
Reimbursement of operating expenses		1		1		2		2

EPB Acquisition. In March 2011, EPB acquired an additional 25 percent ownership interest in us from El Paso. The acquisition increased EPB’s interest in us to 85 percent with El Paso retaining the remaining 15 percent.7

DistributionsTable and Contributions. We are required to make distributions of available cash as defined in our partnership agreement on a quarterly basis to our partners. During the quarter ended March 31, 2011 and 2010, we paid cash distributions of approximately $47 million and approximately $83 million to our partners. In addition, in April 2011, we paid cash distributions to our partners of approximately $81 million. During the first quarter of 2011, we received cash contributions of approximately $25 million from our partners to fund our expansion projects and, in April 2011, we received an additional $36 million.Contents

~~Cash Management Program~~Item 2. ~~We participate in EPB~~Management’s ~~cash~~Discussion ~~management program which matches short-term cash surpluses~~ and ~~needs~~Analysis of ~~participating~~Financial ~~affiliates,~~Condition ~~thus~~and ~~minimizing~~Results total borrowings from outside sources. EPB uses the cash management program to settle intercompany transactions between participating affiliates. At March 31, 2011, we had a note receivable from EPB of approximately $4 million which was classified as non-current on our balance sheet. At December 31, 2010 this note carried a payable balance to EPB of approximately $12 million which was classified as current on our balance sheet. The interest rate on this note is variable and was 0.8% at March 31, 2011 and December 31, 2010.Operations

~~Affiliate~~ The ~~Revenues~~information ~~and~~required ~~Expenses. We~~by ~~enter~~this ~~into~~Item ~~transactions~~is ~~with~~presented ~~our~~in ~~affiliates~~a ~~within~~reduced ~~the~~disclosure ~~ordinary~~format ~~course~~pursuant ofto General ~~business~~Instruction H to Form 10-Q. ~~For~~ aIn ~~further~~addition, ~~discussion~~this ofItem ~~our~~updates, ~~affiliated~~and ~~transactions~~should be read in conjunction with, ~~see~~the information disclosed in our 2010 Annual Report on Form 10-K., ~~The~~and ~~following~~the financial ~~table~~statements ~~shows~~and ~~revenues~~notes ~~and~~presented ~~charges~~in ~~from~~Item 1 ~~our~~of ~~affiliates~~this ~~for~~Quarterly ~~the~~Report ~~quarters~~on ~~ended~~Form ~~March 31:~~10-Q.

	2011		2010
	(In millions)
Revenues	$	2	$	2
Operation and maintenance expenses		27		30
Reimbursements of operating expenses		1		1

Results of Operations

7 Beginning January 1, 2011, our management uses segment earnings before interest expense and income taxes (Segment EBIT) as a measure to assess the operating results and effectiveness of our business, which consists of consolidated operations as well as an investment in an unconsolidated affiliate. We believe Segment EBIT is useful to investors to provide them with the same measure used by our management to evaluate our performance and so that investors may evaluate our operating results without regard to our financing methods. Segment EBIT is defined as net income adjusted for items such as interest and debt expense, and affiliated interest income. Segment EBIT may not be comparable to measures used by other companies. Additionally, Segment EBIT should be considered in conjunction with net income and other performance measures such as operating income or operating cash flows. Below is a reconciliation of our Segment EBIT to net income, our throughput volumes and an analysis and discussion of our results for the six months ended June 30, 2011 compared with the same period in 2010.

~~Table~~Operating ~~of Contents~~Results:

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations


	2011			2010
	(In millions,
	except for volumes)
Operating revenues	$	278		$	276
Operating expenses		(118	)		(118	)

Operating income		160			158
Earnings from unconsolidated affiliate		7			7
Other income, net		4			2

Segment EBIT		171			167
Interest and debt expense		(32	)		(32	)
Affiliated interest income, net		—			1

Net income	$	139		$	136

Throughput volumes (BBtu/d) ⁽¹⁾		2,453			2,535

~~The~~(1) ~~information~~Throughput ~~contained~~volumes ininclude ~~Item~~billable 2transportation ~~updates,~~throughput ~~and~~volumes ~~should~~for bestorage ~~read in conjunction with, information disclosed in our 2010 Annual Report on Form 10-K, and the financial statements and notes presented in Item 1 of this Quarterly Report on Form 10-Q~~injection.

~~Results~~Segment ofEBIT ~~Operations~~Analysis:

Beginning January 1, 2011, our management uses segment earnings before interest expense and income taxes Segment (EBIT) as a measure to assess the operating results and effectiveness of our business, which consists of consolidated operations as well as an investment in an unconsolidated affiliate. We believe Segment EBIT is useful to investors to provide them with the same measure used by our management to evaluate our performance and so that investors may evaluate our operating results without regard to our financing methods. We define Segment EBIT as net income adjusted for items such as interest and debt expense, and affiliated interest income. Segment EBIT may not be comparable to measures used by other companies. Additionally, Segment EBIT should be considered in conjunction with net income and other performance measures such as operating income or operating cash flows. Below is a reconciliation of our Segment EBIT to net income, our throughput volumes and an analysis and discussion of our results for the quarter ended March 31, 2011 compared with the same period in 2010.


	Variance
	Operating			Operating
	Revenue			Expense			Other		Total
	Favorable/(Unfavorable)
	(In millions)
Expansions	$	11		$	(1	)	$	2	$	12
Reservation and usage revenues		(8	)		—			—		(8	)
Other⁽¹⁾		(1	)		1			—		—

Total impact on Segment EBIT	$	2		$	—		$	2	$	4

~~Operating~~(1) ~~Results:~~Consists of individually insignificant items.

	2011			2010
	(In millions, except for volumes)
Operating revenues	$	145		$	145
Operating expenses		(57	)		(59	)
Operating income		88			86
Earnings from unconsolidated affiliate		4			4
Other income, net		2			1
Segment EBIT		94			91
Interest and debt expense		(16	)		(16	)
Affiliated interest income, net		—			1
Net income	$	78		$	76
Throughput volumes (BBtu/d)(1)		2,632			2,899

Expansions. During 2011, we benefited from increased reservation revenues due to Phase I and Phase II of the South System III Expansion project being placed in service. Additionally, in June 2011, we placed Phase II of the Southeast Supply Header project in service; however, our Segment EBIT was not significantly impacted as a result of this project being placed in service.

~~____________~~ Reservation and Usage Revenues. We experienced a decrease of $4 million in our usage and interruptible services for the six months ended June 30, 2011 compared to the same period in 2010, due to record weather conditions in the Southeast during 2010 compared to 2011. Additionally, our

~~(1) Throughput volumes include billable transportation throughput volumes for storage injection.~~8

SegmentTable EBITof Analysis:Contents

	Variance
	Operating			Operating
	Revenue			Expense		Other		Total
	Favorable/(Unfavorable)
	(In millions)
Expansion	$	5		$	—	$	1	$	6
Reservation and other service revenues		(5	)		—		—		(5	)
Operating and general and administrative expenses		—			2		—		2
Total impact on Segment EBIT	$	—		$	2	$	1	$	3

reservation revenues were lower by approximately $4 million during the six months ended June 30, 2011 compared to the same period in 2010 as a result of various contract changes, primarily turned back capacity on our system.

~~Expansion. During~~Affiliated ~~the~~Interest ~~quarter ended March 31~~Income, 2011, we benefited from increased reservation revenues due to Phase I of the South System III expansion project being placed in service. Construction on Phase II of the project began in February 2011 and we expect to place this phase in-service in June 2011.Net

~~Reservation~~ The ~~and~~following ~~Other~~table ~~Services~~shows ~~Revenues. For~~ the ~~quarter~~average ~~ended~~advances ~~March~~due ~~31,~~from ~~2011,~~EPB ~~we experienced lower revenues as a result of a $3 million decrease in our usage~~ and ~~interruptible~~El ~~services when compared to 2010~~Paso, ~~which had extremely cold weather,~~ and athe $2average short-term ~~million~~interest ~~decrease~~rates infor ~~reservation~~the ~~revenue~~periods asended ~~a result of turned back capacity on our system.~~June 30:

Operating and General and Administrative Expenses. Our operating and general and administrative costs were lower during the quarter ended March 31, 2011 compared with the same period in 2010, primarily due to lower allocated costs from El Paso based on the estimated level of resources devoted to us and the relative size of our Segment EBIT, gross property and payroll when compared to El Paso’s other affiliates.


	2011			2010
	(In millions, except for rates)
Average advance due from El Paso	$	—		$	117
Average advance due from EPB		95			—
Average short-term interest rate		0.8	%		1.5	%

~~Affiliated~~Liquidity ~~Interest~~and ~~Income,~~Capital ~~Net~~Resources

~~The~~ Our ~~following~~primary ~~table~~sources ~~shows~~of ~~the~~liquidity ~~average~~are ~~advances~~cash ~~due~~flows from operating activities and amounts available to us under EPB’s cash management program, while our primary uses of cash are for working capital, capital expenditures and required distributions. At June 30, 2011, we had a note receivable from ElEPB ~~Paso~~of approximately $298 million. We classified $80 million of this receivable as current on our balance sheet at June 30, ~~and~~2011 based on the ~~average~~net ~~short-term~~amount ~~interest~~we ~~rates~~anticipate ~~for~~using in the ~~quarters~~next ~~ended~~twelve ~~March~~months ~~31:~~considering available cash sources and needs. See Item 1, Financial Statements, Note 7, for a further discussion of EPB’s cash management program.

	2011			2010
	(In millions, except for rates)
Average advance due from El Paso	$	—		$	137
Average advance due to EPB		10			—
Average short-term interest rate		0.8	%		1.5	%

In June 2011, we and our wholly owned subsidiary, SNIC issued $300 million aggregate principal amount of senior unsecured notes at 4.4 percent, due June 15, 2021. The net proceeds of $297 million from this offering were advanced to EPB under the cash management program and will be subsequently utilized to fund our growth capital expenditures and for general corporate purposes. See Item 1, Financial Statements, Note 4 for a further discussion of our debt issuance.

9 We believe we have adequate liquidity available to us to meet our capital requirements and our existing operating needs through cash flows from operating activities and amounts available to us under EPB’s cash management program. While we do not anticipate a need to directly access the financial markets in the remainder of 2011 for any of our operating activities or expansion capital needs based on liquidity available to us, market conditions may impact our or EPB’s ability to act opportunistically.

~~Table~~ Our cash capital expenditures for the six months ended June 30, 2011 and our estimated capital expenditures for the remainder of ~~Contents~~this year to expand and maintain our system are listed below:

Liquidity and Capital Resources


	Six Months Ended		2011
	June 30, 2011		Remaining		Total
			(In millions)
Expansion	$	74	$	57	$	131
Maintenance		26		30		56

	$	100	$	87	$	187

Liquidity Overview. Our primary sources of liquidity are cash flows from operating activities, amounts available to us under EPB’s cash management program and capital contributions from our partners while our primary uses of cash are for working capital, capital expenditures and required distributions to our partners. At March 31, 2011, we had a note receivable from EPB of approximately $4 million. We do not intend to settle any amounts owed under this note within the next twelve months and therefore, classified it as non-current on our balance sheet. See Item 1, Financial Statements, Note 6, for a further discussion of EPB’s cash management program. 10

WeTable believe we have adequate liquidity available to us to meet our capital requirements and our existing operating needs through cash flow from operating activities, amounts available to us under EPB’s cash management program and capital contributions from our partners. As of March 31, 2011, EPB had approximately $342 million of capacity available to it under its $750 million revolving credit facility and $36 million of cash. While we do not anticipate a need to directly access the financial markets in the remainder of 2011 for any of our operating activities or expansion capital needs based on liquidity available to us, market conditions may impact our or EPB’s ability to act opportunistically.Contents

~~2011~~Commitments ~~Cash~~and ~~Flow Activities. Our cash flows for the quarter ended March 31, 2011 are summarized as follows (in millions):~~ Contingencies

Cash Flow from Operations
Net income	$	78
Non-cash income adjustments		11
Change in assets and liabilities		(1	)
Total cash flow from operations		88
Other Cash Inflows
Investing activities
Other		3
Financing activities
Contributions from partners		25
Total other cash inflows other cash inflows		28
Cash Outflows
Investing activities
Capital expenditures		51
Net change in note receivable from affiliate		4
		55
Financing activities
Net change in note payable to affiliate		12
Distributions to partners		47
		59
Total cash outflows		114
Net change in cash and cash equivalents	$	2

For a further discussion of our commitments and contingencies, see Item 1, Financial Statements, Note 5 which is incorporated herein by reference and our 2010 Annual Report on Form 10-K.

10Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Table~~ Omitted offrom ~~Contents~~this report pursuant to the reduced disclosure format permitted by General Instruction H to Form 10-Q.

~~During the quarter ended March 31, 2011, we generated $88 million of operating cash flow~~Item 4. WeControls used these amounts primarily to fund maintenance capital expenditures, as well as pay distributions to our partners. During the quarter ended March 31, 2011, we paid cash distributions of approximately $47 million to our partners. In addition, in April 2011, we paid a cash distribution to our partners of approximately $81 million. In January 2011 and ~~April 2011, we received cash contributions of approximately $25 million and $36 million from our partners to fund our expansion projects.~~Procedures

~~Our~~Evaluation ~~cash capital expenditures for the quarter ended March 31, 2011 and our estimated capital expenditures for the remainder~~ of ~~this~~Disclosure ~~year~~Controls ~~to expand~~ and ~~maintain our system are listed below:~~Procedures

	Quarter Ended March 31, 2011		2011 Remaining		Total
	(In millions)
Expansion	$	40	$	94	$	134
Maintenance		11		53		64
	$	51	$	147	$	198

As of June 30, 2011, we carried out an evaluation under the supervision and with the participation of our management, including our President and Chief Financial Officer (CFO), as to the effectiveness, design and operation of our disclosure controls and procedures. This evaluation considered the various processes carried out under the direction of our disclosure committee in an effort to ensure that information required to be disclosed in the U.S. Securities and Exchange Commission reports we file or submit under the Securities Exchange Act of 1934, as amended (Exchange Act) is accurate, complete and timely. Our management, including our President and CFO, does not expect that our disclosure controls and procedures or our internal controls will prevent and/or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our President and CFO concluded that our disclosure controls and procedures (as defined in Exchange Act Rules 13a — 15(e) and 15d — 15(e)) were effective as of June 30, 2011.

11Changes in Internal Control Over Financial Reporting

~~Table~~ There were no changes in our internal control over financial reporting during the second quarter of ~~Contents~~2011 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

~~Commitments and Contingencies~~11

ForTable a further discussion of our commitments and contingencies, see Item 1, Financial Statements, Note 4 which is incorporated herein by reference and our 2010 Annual Report on Form 10-K.Contents

~~Item 3. Quantitative~~PART ~~and~~II ~~Qualitative~~— ~~Disclosures~~OTHER ~~About Market Risk~~INFORMATION

~~There~~Item 1. ~~are~~Legal ~~no material changes in our quantitative and qualitative disclosures about market risks from those reported in our 2010 Annual Report on Form 10-K.~~Proceedings

See Part I, Item ~~4. Controls~~1, ~~and~~Financial ~~Procedures~~Statements, Note 5 which is incorporated herein by reference.

~~Evaluation~~Item 1A. ofRisk ~~Disclosure Controls and Procedures~~Factors

AsCAUTIONARY ofSTATEMENTS ~~March~~FOR ~~31,~~PURPOSES ~~2011,~~OF weTHE ~~carried~~“SAFE ~~out~~HARBOR” anPROVISIONS ~~evaluation~~OF THE ~~under~~PRIVATE ~~the~~SECURITIES ~~supervision~~LITIGATION ~~and~~REFORM ~~with~~ACT ~~the~~OF participation of our management, including our President and Chief Financial Officer (CFO), as to the effectiveness, design and operation of our disclosure controls and procedures. This evaluation considered the various processes carried out under the direction of our disclosure committee in an effort to ensure that information required to be disclosed in the U.S. Securities and Exchange Commission reports we file or submit under the Securities Exchange Act of 1934, as amended (Exchange Act) is accurate, complete and timely. Our management, including our President and CFO, does not expect that our disclosure controls and procedures or our internal controls will prevent and/or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our President and CFO concluded that our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(e) and 15d – 15(e)) were effective as of March 31, 2011.1995

~~Changes~~ This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions or beliefs that we believe to be reasonable; however, assumed facts almost always vary from actual results, and differences between assumed facts and actual results can be material, depending upon the circumstances. Where, based on assumptions, we or our management express an expectation or belief as to future results, that expectation or belief is expressed in ~~Internal~~good ~~Control~~faith ~~Over~~and ~~Financial~~is ~~Reporting~~believed to have a reasonable basis. We cannot assure you, however, that the stated expectation or belief will occur, be achieved or accomplished. The words “believe,” “expect,” “estimate,” “anticipate,” and similar expressions will generally identify forward-looking statements. All of our forward-looking statements, whether written or oral, are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements. In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report.

~~There~~ Important ~~were~~factors nothat ~~changes~~could incause ~~our~~actual ~~internal~~results ~~control~~to ~~over~~differ ~~financial~~materially ~~reporting~~from ~~during~~estimates ~~the~~or projections ~~first~~contained ~~quarter~~in offorward-looking ~~2011~~statements ~~that~~are ~~have~~described ~~materially~~in ~~affected~~our or2010 ~~are~~Annual ~~reasonably~~Report ~~likely~~on toForm 10-K ~~materially~~under ~~affect~~Part I, ~~our~~Item 1A, ~~internal~~Risk ~~control~~Factors. ~~over~~There ~~financial~~have ~~reporting~~been no material changes in these risk factors since that report.

12Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Table~~ Omitted offrom ~~Contents~~this report pursuant to the reduced disclosure format permitted by General Instruction H to Form 10-Q.

~~PART~~Item ~~II —~~3. ~~OTHER~~Defaults ~~INFORMATION~~Upon Senior Securities

~~Item 1. Legal~~ Omitted ~~Proceedings~~from this report pursuant to the reduced disclosure format permitted by General Instruction H to Form 10-Q.

~~See Part I,~~ Item ~~1, Financial Statements, Note~~ 4. ~~which~~(Removed isand ~~incorporated herein by reference.~~Reserved)

Item 1A5. ~~Risk~~ ~~Factors~~Other Information

~~CAUTIONARY STATEMENTS FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF~~ None.

~~THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995~~12

ThisTable report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions or beliefs that we believe to be reasonable; however, assumed facts almost always vary from actual results, and differences between assumed facts and actual results can be material, depending upon the circumstances. Where, based on assumptions, 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 stated expectation or belief will occur, be achieved or accomplished. The words “believe,” “expect,” “estimate,” “anticipate,” and similar expressions will generally identify forward-looking statements. All of our forward-looking statements, whether written or oral, are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements. In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of this report.Contents

Important factors that could cause actual results to differ materially from estimates or projections contained in forward-looking statements are described in our 2010 Annual Report on Form 10-K under Part I, Item ~~1A, Risk Factors~~ 6. ~~There have been no material changes in these risk factors since that report.~~Exhibits

~~Item~~ The Exhibit ~~2. Unregistered~~Index ~~Sales~~is ofhereby ~~Equity~~incorporated ~~Securities~~herein ~~and~~by ~~Use of Proceeds~~reference.

~~None~~ The agreements included as exhibits to this report are intended to provide information regarding their terms and not to provide any other factual or disclosure information about us or the other parties to the agreements. The agreements may contain representations and warranties by the parties to the agreements, including us, solely for the benefit of the other parties to the applicable agreement and:

~~Item 3. Defaults~~• ~~Upon~~should ~~Senior~~not ~~Securities~~in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; • may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; • may apply standards of materiality in a way that is different from what may be viewed as material to certain investors; and • were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

~~None~~ Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.

~~Item 4. (Removed and Reserved)~~13

Item 5. OtherTable Informationof Contents

~~None.~~SIGNATURES

13 Pursuant to the requirements of the Securities Exchange Act of 1934, Southern Natural Gas Company, L.L.C. has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Table of Contents


	SOUTHERN NATURAL GAS COMPANY, L.L.C.
Date: August 5, 2011	/s/ Norman G. Holmes
	Norman G. Holmes
	President (Principal Executive Officer)

Date: August 5, 2011	/s/ John R. Sult
	John R. Sult
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

~~Item 6. Exhibits~~14

TheTable Exhibit Indexof is incorporated herein by reference.Contents

~~The~~SOUTHERN ~~agreements~~NATURAL ~~included~~GAS as exhibits to this report are intended to provide information regarding their terms and not to provide any other factual or disclosure information about us or the other parties to the agreements. The agreements may contain representations and warranties by the parties to the agreementsCOMPANY, ~~including us, solely for the benefit of the other parties to the applicable agreement and:~~L.L.C.

•EXHIBIT should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; • may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; • may apply standards of materiality in a way that is different from what may be viewed as material to certain investors; and • were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.INDEX

~~Accordingly,~~ Each ~~these~~exhibit ~~representations~~identified ~~and~~below ~~warranties~~is ~~may~~filed ~~not~~as ~~describe~~a ~~the~~part ~~actual~~of ~~state~~this ofReport. ~~affairs~~Exhibits asfiled ofwith ~~the~~this Report ~~date~~are ~~they~~designated ~~were~~by ~~made~~“*”. orAll atexhibits ~~any~~not ~~other~~so ~~time~~designated are incorporated herein by reference to a prior filing as indicated.


Exhibit
Number		Description
*3.A		Sixth Amendment to General Partnership Agreement of Southern Natural Gas Company.

*3.B		First Amended and Restated Limited Liability Company Agreement of Southern Natural Gas Company, L.L.C.

4.A		Seventh Supplemental Indenture dated as of June 7, 2011, among the Issuers and Wilmington Trust Company, as trustee (including the form of 4.40% Note due 2021) (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on June 9, 2011).

4.B		Registration Rights Agreement, dated as of June 7, 2011, among the Issuers and the Initial Purchasers named therein (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on June 9, 2011).

10.A		Purchase Agreement, dated as of June 2, 2011, among the Issuers, EPP SNG GP Holdings L.L.C., El Paso SNG Holding Company, L.L.C. and the Initial Purchasers named therein (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on June 9, 2011).

*12		Ratio of Earnings to Fixed Charges.

*31.A		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.B		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*32.A		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.B		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*101.INS		XBRL Instance Document.

*101.SCH		XBRL Schema Document.

*101.CAL		XBRL Calculation Linkbase Document.

*101.LAB		XBRL Labels Linkbase Document.

*101.PRE		XBRL Presentation Linkbase Document.

~~Table of Contents~~15

SIGNATURES

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

	SOUTHERN NATURAL GAS COMPANY
Date: May 6, 2011	/s/ Norman G. Holmes
	Norman G. Holmes President (Principal Executive Officer)
Date: May 6, 2011	/s/ John R. Sult
	John R. Sult Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Table of Contents

SOUTHERN NATURAL GAS COMPANY

EXHIBIT INDEX

Each exhibit identified below is filed as a part of this report.

Exhibit Number		Description
	3.A	Fifth Amendment to General Partnership Agreement of Southern Natural Gas Company, dated March 14, 2011.
*	12	Ratio of Earnings to Fixed Charges.
	31.A	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.B	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.A	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.B	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Filing Compare · SOUTHERN NATURAL GAS COMPANY, L.L.C.