HOUSTON, TEXAS, August 1, 2001-Recent industry filings at the Federal Energy Regulatory Commission (FERC) concerning capacity issues on the El Paso Natural Gas pipeline substantiate El Paso Corporation's (NYSE:EPG) position that the recent surge in demand both east and west of the California border-not market manipulation-was the defining factor in high prices for natural gas in the state. The demand clearly exceeded available pipeline capacity of all pipelines serving Western markets.

These filings have been mischaracterized in the press. They do not address any accusations of market manipulation by the pipeline or its merchant affiliate. In fact, the filings involve a dispute between two groups of customers, those within California and those east of the California border, over how the existing pipeline capacity should be allocated.

El Paso Corporation is committed to meeting energy needs throughout North America and the world with operations that span the energy value chain from wellhead to electron. The company is focused on speeding the development of new energy sources to address critical energy shortages across the globe. Visit El Paso at www.elpaso.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.