HOUSTON, TEXAS, July 24, 2000-El Paso Merchant Energy Company, a business unit of El Paso Energy Corporation (NYSE:EPG), announced today that it is expanding its commercial platform in the electric power industry by forming EP Power Finance, L.L.C. In the process, El Paso Merchant Energy Company has hired a team of four executives to head up the unit. Managing directors are Mark Condon, former senior vice president of Heller Financial, Inc.; Jim Jewitt, former president of ESBI Energy Company; Scott Lamoreaux, former vice president of Stratum Group L.P.; and Gar Seifullin, former senior vice president of Heller Financial, Inc.

"We are very excited about this highly qualified group of executives joining El Paso Energy," said Ralph Eads, executive vice president of El Paso Energy. "The qualifications and experience these individuals bring to El Paso Energy will substantially enhance our existing skill base and expand our financial services capabilities. The formation of EP Power Finance furthers our commitment to providing a seamless portfolio of capital and commodity market offerings to our customers and partners."

The new organization expands the financial services platform of El Paso Energy and complements its EnCap Investments unit. EP Power Finance primarily will focus on power and power-related opportunities in the North American energy marketplace. El Paso Energy now offers innovative capital products from wellhead to wire as deregulation accelerates the convergence of the gas and power industries.

EP Power Finance will provide subordinated debt and structured financial products to developers and acquirers of merchant power generation assets. The group will offer debt capital with a higher risk/return profile for transactions that range from greenfield development projects to the acquisition of multi-asset generation portfolios. These investment professionals will work with clients to develop financial structures that manage risk and optimize the return on deployed capital.

With over $19 billion in assets, El Paso Energy Corporation provides comprehensive energy solutions through its strategic business units: Tennessee Gas Pipeline Company, El Paso Natural Gas Company, Southern Natural Gas Company, El Paso Merchant Energy Company, El Paso Energy International Company, El Paso Field Services Company, and El Paso Production Company. The company owns North America's largest natural gas pipeline system, both in terms of throughput and miles of pipeline, and has operations in natural gas transmission, merchant energy services, power generation, international project development, gas gathering and processing, and gas and oil production. On May 5, the stockholders of both El Paso Energy and The Coastal Corporation overwhelmingly voted in favor of merging the two organizations. The combined company will have assets of $35 billion and be one of the world's leading integrated energy companies. The merger is expected to close in the fourth quarter of this year, concurrent with the completion of regulatory reviews. Visit El Paso Energy's web site at www.epenergy.com.

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.