Houston, Texas, February 2, 1998-El Paso Energy International Company, a business unit of El Paso Energy Corporation (NYSE:EPG), announced today it has increased its ownership interest from 33 percent to 45 percent in CAPSA, a privately-held, integrated energy company in Argentina. El Paso Energy invested $65 million to acquire the additional 12 percent ownership in the transaction which closed on January 30, 1998. El Paso Energy originally purchased a 29 percent interest in the company in March 1997, and exercised an option for an additional 4 percent in August 1997.

CAPSA was incorporated in 1977 for the purpose of exploring for, producing, and selling liquid hydrocarbons. The company's assets include 100 percent ownership of the Diadema Oil Field and 55 percent ownership of CAPEX, a publicly traded company that owns, and recently began an expansion of its 382-megawatt Agua del Cajon gas-fired power plant to 670 megawatts. This plant, which has been fully operational since 1995, buys gas from the Agua del Cajon gas field, owned by CAPSA. In the past year, CAPSA has also increased its reserve holdings by 51 percent, and began construction on a new Liquid Propane Gas (LPG) processing plant in September 1997 which will be operated by El Paso Field Services Company, a business unit of El Paso Energy Corporation.

"We're pleased to increase our ownership in CAPSA and proud to be a partner in such a solid and well-managed company," said William A. Wise, chairman, president, and chief executive officer of El Paso Energy Corporation. "Partnering with CAPSA creates additional opportunities to expand our investments throughout the Mercosur energy markets."

El Paso Energy International, CAPEX, and InterEnergy have also formed a new development company called Triunion Energy Company to seek out additional business opportunities related to new energy projects in Latin America. CAPEX will provide the day-to-day administrative and management services for most of the projects within the joint venture. Triunion Energy also will house El Paso's Energy's asset interest in an exploration and production project in Charagua, Bolivia (adjacent to the Bolivia-to-Brazil pipeline project which is under construction), as well as its interest in the Gasoducto del Pacifico pipeline project. This $400 million natural gas pipeline will stretch 331 miles across the Andes mountains and connect Argentina's Neuquén basin to customers in Concepción, Chile. Construction on the pipeline is scheduled to be underway early this year with an expected in service day of late 1999.

"The opportunity to extend our development efforts into Southern Latin America through Triunion Energy fits perfectly into our strategic international growth plan," said John Hushon, president of El Paso Energy International.

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 Energy International Company, El Paso Field Services Company and El Paso Energy Marketing Company. The company owns the nation's only integrated coast-to-coast natural gas pipeline system and has operations in interstate natural gas transmission, international infrastructure development, gas gathering and processing, and energy marketing.

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.