DALLAS, TEXAS, June 20, 2000-Panda Energy International, Inc. and El Paso Energy Corporation (NYSE:EPG) announced today that they have taken a critical step forward in meeting the fuel transportation needs of a new 2,720-megawatt generating facility being built by Panda in El Dorado, Arkansas.

Union Power Partners, L.P., Panda's project affiliate, and its pipeline affiliate, Trans-Union Interstate Pipeline L.P., have signed interconnection and transportation agreements with Gulf States Pipeline, a subsidiary of El Paso Field Services. El Paso Field Services is the midstream business unit of El Paso Energy Corporation.

In a related move, Union Power Partners also signed firm transportation agreements with Tennessee Gas Pipeline Company, a pipeline business unit of El Paso Energy.

As part of its overall development plans, Panda said Trans-Union would build a new 42-mile, 30-inch pipeline connecting the El Dorado plant with the Gulf States Pipeline in Sharon, Louisiana. Required filings, including detailed environmental and cultural impact studies, were presented to the Federal Energy Regulatory Commission in December 1999. The agency's approval to begin construction of the line is expected by mid-summer.

When completed, the plant will have a nominal usage of 430,000 MMBtu of natural gas per day. Union Power Partners will be able to access various gas basins in Texas, Louisiana and Oklahoma.

Panda CEO Robert W. Carter called the agreements a "critical link" in the culmination of the facility, the largest 100-percent merchant plant ever built in this country.

"Reliable delivery of fuel is one of the most important aspects of this, and any other, power plant," Carter explained. "Through these agreements, we have done a lot to ensure long-term reliability by partnering with El Paso, one of the most respected companies in the natural gas transportation business."

Carter said site preparation is underway. First phase operations are scheduled to go on line in the spring of 2002. An average of 700 workers, with a peak of 1,200, will be employed during construction phases.

"We are pleased to enhance our strong relationship with Panda by providing the primary natural gas delivery service to their new El Dorado power plant," said Robert G. Phillips, president of El Paso Field Services Company. "By expanding the Gulf States Pipeline, El Paso Energy continues to meet the needs of its customers through innovative business solutions."

Stephen C. Beasley, president of Tennessee Gas Pipeline Company added, "Tennessee is pleased to have been chosen for firm transportation that will diversify Panda's supply portfolio, and welcomes the opportunity to provide flexible and competitively priced services to the merchant electrical generating industry."

Panda Energy is a privately held, non-regulated electric generation company headquartered in Dallas. Its primary focus is the development, ownership and operation of clean, low-cost power plants. In addition to El Dorado, it has facilities under development near Coweta, Okla.; Gila Bend, Ariz.; Tallmadge, Mich.; Allentown Pa.; Culloden, West, Va.; New Florence, Mo.; and Port St. Lucie and Leesburg, Fla. Construction is under way on 1,000-megawatt facilities near Paris, Marion and Odessa, Tex. In addition, the company operates plants in Roanoke Rapids, N.C. and Brandywine, Md. Further details are available on Panda's Web site at www.pandaenergy.com.

With over $16 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.

Contacts:
Panda Energy International, Inc.
Striegel & Associates
Peggy Striegel
Office: (800) 663-1136
E-mail: ps@striegela.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 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.