HOUSTON, July 10 /PRNewswire-FirstCall/ -- El Paso Corporation (NYSE: EP) ("El Paso") responded to a July 9, 2003 Federal Energy Regulatory Commission (FERC) order which reaffirmed that full requirements contracts must be converted to contract demand contracts effective September 1, 2003, and concluded that El Paso Natural Gas Company (EPNG) has honored its certificate obligations, a 1996 settlement between EPNG and its customers, and the Commission's regulations.

    Among other things, the order supports EPNG's position relative to:
    -- The maximum amount of pipeline capacity it can make available to its
       shippers;
    -- The proper meaning of Maximum Allowable Operating Pressure;
    -- EPNG's obligations under its 1996 settlement; and
    -- EPNG's service obligations under its contracts and certificates.

In a September 2002 proposed decision in a separate proceeding, a FERC Administrative Law Judge (ALJ), over EPNG's objection, recommended that FERC adopt a different interpretation of EPNG's service obligations.

"This decision is an extremely positive development for El Paso's shareholders, employees, and the natural gas industry as a whole," said Ronald L. Kuehn, Jr., president and chief executive officer of El Paso Corporation. "EPNG has steadfastly maintained over the past three years that it operated its system in a safe and reliable manner and in accordance with its contractual and regulatory obligations. This decision reinforces that position."

"This decision, coupled with El Paso's recent comprehensive settlement resolving numerous lawsuits, investigations, and proceedings arising out of the western energy crisis, will allow EPNG to move beyond this very difficult time in its history and focus on continuing to provide safe and reliable service to its customers while enhancing shareholder value. The clarification of EPNG's service obligations will contribute to El Paso's continuing efforts to regain its position as a leader in the energy industry."

El Paso Corporation is the leading provider of natural gas services and the largest pipeline company in North America. The company has core businesses in pipelines, production, and midstream services. Rich in assets, El Paso is committed to developing and delivering new energy supplies and to meeting the growing demand for new energy infrastructure. For more information, visit www.elpaso.com .

Cautionary Statement Regarding Forward-Looking Statements

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 company 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, including, without limitation, our ability to attract and retain qualified members of the Board of Directors; the successful recruitment and retention of a qualified CEO; the successful implementation of the 2003 operational and financial plan; the successful implementation of the settlement related to the Western Energy Crisis; actions by the credit rating agencies; our ability to successfully exit the energy trading business; our ability to divest of certain non-core assets; changes in commodity prices for oil, natural gas, and power; general economic and weather conditions in geographic regions or markets served by El Paso Corporation and its affiliates, or where operations of the company and its affiliates are located; the uncertainties associated with governmental regulation; inability to realize anticipated synergies and cost savings associated with restructurings and divestitures on a timely basis; competition, and other factors described in the company's (and its affiliates') Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.

SOURCE  El Paso Corporation
    -0-                             07/10/2003
    /CONTACT:  Communications and Government Affairs, Norma F. Dunn, Senior
Vice President, +1-713-420-3750, or fax, +1-713-420-3632, or Investor
Relations, Bruce L. Connery, Vice President, +1-713-420-5855, or fax,
+1-713-420-4417, both of El Paso Corporation/
    /Web site:  http://www.elpaso.com /
    (EP)

CO:  El Paso Corporation; Federal Energy Regulatory Commission; El Paso
     Natural Gas Company
ST:  Texas
IN:  OIL
SU:



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