El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
Tennessee Gas Pipeline, Pemex to Build International Pipeline Connection
Houston, Texas, June 30, 1998-Tennessee Gas Pipeline Company, a business unit of El Paso Energy Corporation
(NYSE:EPG), announced today an agreement in principle with Pemex
Gas Y Petroquímica Básica (Pemex), a subsidiary of Petróleos Mexicanos, the national
oil company of Mexico, for interconnecting facilities between the companies'
pipelines. The new facilities will be constructed from the end of Tennessee Gas
Pipeline's Donna lateral located in Hidalgo County, Texas, cross the International
border, and connect to Pemex's existing facilities in Reynosa, Mexico.
The interconnect will enable Tennessee Gas Pipeline and Pemex to transport gas between
the two countries creating additional supply and market opportunities for customers on the
Tennessee Gas Pipeline system. The interconnect is expected to be in service by January
"This agreement strengthens Tennessee Gas Pipeline's commitment to providing
its customers with access to superior supplies and premier markets," said John W.
Somerhalder II, president of Tennessee Gas Pipeline Company. "This interconnect is an
historic milestone that provides Tennessee Gas Pipeline customers with transportation
options from the US-Mexican border to the US-Canadian border. We look forward to the
opportunities it will provide both Tennessee Gas Pipeline and Pemex in the near term and
in the future."
Pemex has entered into a 10-year commitment for 185,000 dekatherms per day (dth/d) of
firm capacity on Tennessee Gas Pipeline. The companies expect to execute final agreements
in the next few weeks and begin construction of the facilities later this year after
receiving all regulatory approvals.
In 1995, Mexico opened the door to competition for the transmission, distribution and
sale of natural gas within its borders. With several of its markets now open to private
participation, Pemex faces both new business opportunities and challenges in serving the
needs of its most important customers. The interconnect with Tennessee Gas Pipeline will
provide Pemex with additional pipeline flexibility to meet these challenges.
With over $9 billion in assets, El Paso Energy Corporation provides energy
solutions through five business units: Tennessee Gas Pipeline Company, El Paso
Natural Gas Company, El Paso Field Services Company, El Paso Energy Marketing
Company, and El Paso Energy International Company. The company owns the nation's
only integrated coast-to-coast natural gas pipeline system and has operations in
interstate natural gas transmission, gas gathering and processing, energy marketing, and
international infrastructure development. Visit El Paso Energy's web site at
Pemex Gas Y Petroquímica Básica, one of the four subsidiaries of Petróleos
Mexicanos, had 1997 Net Operating Income of US$222 million. The company actively
participates in the process of change in the gas industry within Mexico, and is currently
making investments to modernize its transportation and marketing systems.
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 companies have 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 companies make these statements and projections in good faith,
neither the companies nor their managements can guarantee that the anticipated future
results will be achieved. Reference should be made to the companies' (and their
affiliates') Securities and Exchange Commission filings for additional important
factors that may affect actual results.