LAKEWOOD, COLORADO, June 30, 1997-In conjunction with TransColorado Gas Transmission Co.'s recent announcement to proceed with the construction and in-service of Phase II of the TransColorado Pipeline Project, the partners today have announced a restructured arrangement for the project.

Previously, TransColorado has been an equal one-third partnership among affiliates of KN Energy, Inc. (NYSE: KNE), El Paso Energy Corporation (NYSE: EPG) and Questar Corporation (NYSE: STR).

Under this restructured arrangement, an affiliate of El Paso will continue as the operator and revenue participant of Phase I of TransColorado until such time as Phase II of the project is completed and in service. Phase I of the project consists of approximately 22.5 miles of 24-inch pipe and 2.5 miles of 16-inch pipe from the discharge of the Coyote Gulch Gas Plant to an interconnect with El Paso at Blanco, N.M.

Phase II of the project will now become an equal, one-half partnership between affiliates of KN Energy and Questar. Phase II, which is anticipated to be in-service by the fourth quarter of 1998, is now proposed to consist of approximately 270 miles of 22- and 24-inch pipe. In addition, there will be two mainline compressor stations totaling approximately 10,000 nominal site-rated horsepower, extending from an interconnect with the mainline transmission facilities of Questar Pipeline Co.in the Big Hole area of Rio Blanco County in northwest Colorado to the Phase I mainline transmission facilities located in northwestern New Mexico.

Contacts

KN Energy, Inc
Mark Stutz
(303) 914-4649

Questar Corp.
S. Curt Burnett
(801) 324-5541

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.