Northern Natural Gas Company                                                  Original Sheet No. 269C
FERC Gas Tariff
Fifth Revised Volume No. 1

                                    GENERAL TERMS AND CONDITIONS


                   (viii)  Trade Groups.


                           Effective June, 1, 2005 Shippers may form a trading group (Trade Group) to
                           resolve imbalances. Trading groups must be composed of Shippers having like
                           imbalances, i.e.  Market Area imbalances, Field Area imbalances or Gulf
                           Coast Area imbalances.  Each Shipper must have executed an agreement with
                           the other members of the Trade Group demonstrating their consent to trade
                           imbalances.  The minimum term of the trading agreement is a minimum of one
                           year.

                           A Trade Group election form will be posted on the website to notify
                           Northern of the Trade Group participants.  Such notification must be
                           received by June 1, 2005 for the June production month or by the first of
                           the month for any production month thereafter.

                           Northern will continue to create imbalance statements for the individual
                           trading parties in the currently accepted format and pursuant to the
                           existing pricing provisions in the tariff by the 9th business day following
                           the production month.  Northern will administer the trading among the
                           parties so that a net imbalance is created for the entire Trade Group each
                           month.

                           The net imbalance will be priced at the applicable high/low weekly pricing
                           with tiering and at the average weekly MIP. The amount by which the
                           high/low weekly pricing with tiering exceeds the amount calculated using
                           the average weekly MIP is the amount to be allocated to the individual
                           Trade Group members.  The allocation to each member will be based on each
                           member's amount that would have been different from the average MIP with
                           tiering had it been cashed-out individually.  By the 12th business day
                           following production month, Northern will provide an imbalance statement
                           showing the cash-out amount for each individual party in the trading group
                           at the average MIP less the allocated high/low amount.  The net cashout
                           amount will be settled by the 17th business day, with payment either made
                           or received by Northern.

                           A shipper participating in a Trade Group cannot use the other imbalance
                           resolution options provided in Northern's tariff.


 

















Issued by: Mary Kay Miller, V.P. Regulatory & Government Affairs
Issued on: November 24, 2004                                                             Effective: February 14, 2005