HOUSTON, TEXAS, August 18, 1997-El Paso Energy International Company, a business unit of El Paso Energy Corporation (NYSE:EPG), has agreed to construct a 250 megawatt (MW) power plant in Manaus, the capital city of the state of Amazonas in northern Brazil. Construction is on a fast track to help relieve frequent blackouts and power shortages in the city. These shortages are a result of a rapid growth in electrical demand and an unusually dry period causing a reduction in hydroelectric generating capacity.

"These blackouts and shortages have been extremely severe in the city of Manaus because it is remotely located and not connected to the Brazilian electrical power grid," said John Hushon, president of El Paso Energy International Company. "We're working very closely with Eletrobras and Eletronorte to expedite the process in order to get power to the people who live in and around this capital city."

The $100 million Manaus Power Project is scheduled to be built in three phases. The first phase is a 44 MW unit that is expected to be on-line and delivering electricity to the city by mid-November of this year-less than 120 days from project commitment. The remaining two phases of the project are planned to be operational in early January 1998. Construction for the first unit has already begun in Houston and will be airlifted to Manaus. Initially, the plant will be simple cycle turbine generators powered by fuel oil. However,

El Paso Energy International plans to convert the plants to natural gas-fired combined cycle plants within the next four to five years.

Power from the plants will be sold under a four year contract to Eletronorte with an option to extend the agreement another one to six years. El Paso expects to conclude an arrangement with a partner for the project in about 30 days and to finance the project at year end startup.

"Manaus is one of the most rapidly growing industrial centers in Brazil," said Hushon. "We have once again demonstrated that our quick project response time can help alleviate significant power shortages. El Paso Energy International is committed to developing the overall power infrastructure of Brazil which will raise that country's standard of living by making natural gas and electricity more affordable and more accessible."

In addition to the Manaus Power Project, El Paso Energy International is a partner in the $2 billion Bolivia to Brazil pipeline which is under construction. The company has plans to build, own and operate a 150 MW power plant in the state of Mato Grosso do Sul in Western Brazil and a 450-megawatt (MW) gas fired power plant in the north of the state of Rio de Janeiro, Brazil located in the region of Macaé.

El Paso Energy Corporation provides total energy solutions through five business units: El Paso Natural Gas Company, Tennessee Gas Pipeline Company, El Paso Field Services Company, El Paso Energy Marketing Company and El Paso Energy International Company. With offices worldwide, the company has operations in interstate natural gas transmission, gas gathering and processing, energy marketing, and international energy infrastructure development.

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. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that the anticipated future results will be achieved. Reference should be made to the company's (and its affiliates') Securities and Exchange Commission filings for additional important factors that may affect actual results.