Primary assets included in the transaction are a total of 10,677 miles of natural gas transportation assets including the EPGT Texas intrastate pipeline, gathering systems in the Permian Basin, and an interest in the Indian Basin gas plant located in southeast New Mexico. Total consideration for these transactions is $750 million-approximately eight times expected cash flow as measured by earnings before interest, taxes, depreciation, and amortization (EBITDA). For the assets, EPN will pay to El Paso Corporation approximately $560 million in cash and $190 million in kind, consisting of the Prince Tension Leg Platform (TLP) and related field royalty interest.

Subject to the closing of the transaction, the Board of Directors of El Paso Energy Partners has authorized a $0.10 per unit distribution increase, which will raise the annual distribution to $2.60 per common unit ($0.65 per quarter).

"With the closing of this transaction, we will have increased our cash distribution four times, an increase of 13 percent, in the past year," said Robert G. Phillips, chief executive officer of El Paso Energy Partners. "These increases are due to the more than $1.5 billion of midstream asset acquisitions, including this transaction, made from El Paso Corporation since it became the general partner in 1998, as well as growing contributions from our Gulf of Mexico assets. The assets to be acquired have historically generated consistently stable cash flow and will further diversify EPN's operations, which include oil and natural gas pipelines; natural gas storage; natural gas liquids fractionation, pipelines and storage; and offshore platform services. This transaction, our largest and most important to date, will significantly enhance the partnership's onshore asset base and is just another step in implementing EPN's proven midstream growth strategy. Going forward we expect to continue developing greenfield transportation infrastructure and platform projects in the Gulf of Mexico, like the recently announced Cameron Highway Oil Pipeline. We will also continue to complete acquisitions that are immediately accretive to cash flow to provide our unitholders with consistent distribution increases. We think this transaction solidly accomplishes these goals.

"We expect to finance the transaction through permanent debt and equity financing in accordance with our strategy to maintain a strong balance sheet. Longer-term, our objective is to reduce EPN's overall debt-to-total capital ratio to the 50-percent level," concluded Phillips.

The assets to be acquired include the 9,400-mile EPGT Texas intrastate pipeline, which has an operating capacity of nearly 5 billion cubic feet of natural gas per day (Bcf/d). EPGT deliveries averaged 3,500 thousand dekatherms per day (Mdth/d) during 2001. EPN also will acquire the 1,300-mile Permian Basin gathering systems with a capacity of 465 million cubic feet per day and average net 2001 throughput of 341 Mdth/d, and a 42.3-percent non- operated interest in the Indian Basin gas processing and treating plant and associated gathering lines.

As part of the transaction, EPN will transfer its Prince TLP and 9-percent overriding royalty interest in the Prince Field to El Paso Production Company, a business unit of El Paso Corporation and the field operator. EPN will retain third-party marketing rights for remaining platform capacity and an option to repurchase the platform at the end of the Prince Field reserve life.

El Paso Energy Partners, L.P. is one of the largest publicly traded master limited partnerships with interests in a diversified set of midstream assets, including onshore and offshore natural gas and oil pipelines; offshore production platforms; natural gas storage and processing facilities, and natural gas liquids fractionation, transportation, storage and terminal assets.

    Visit El Paso Energy Partners on the Web at www.elpasopartners.com .

This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The partnership has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. While the partnership makes these statements and projections in good faith, neither the partnership nor its management can guarantee that the anticipated future results will be achieved. Reference should be made to the partnership's (and its affiliates') Securities and Exchange Commission filings for additional important factors that may affect actual results.

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CONTACT:          Communications & Government Affairs, Norma F. Dunn, Senior Vice
                  President, +1-713-420-3750, or fax, +1-713-420-3632, or Investor Relations,
                  Sandra M. Ryan, Director, +1-832-676-5371, or fax, +1-832-676-1195, both of El
                  Paso Energy Partners, L.P.

URL:              http://www.elpasopartners.com 
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