HOUSTON, TEXAS, February 15, 2000—El Paso Merchant Energy Company, a business unit of El Paso Energy Corporation (NYSE:EPG), announced today that it has completed the purchase of 1,248,975 MMBtu/d of capacity from El Paso Natural Gas Company, also a unit of El Paso Energy. The capacity was purchased for a fifteen-month period beginning March 1, 2000 and ending May 31, 2001 at a purchase price of $38.5 million.

The capacity purchase will further enable El Paso Merchant Energy to maximize the value of its recently acquired power generation assets in California and across the Southwest by providing them with a secure source of clean-burning natural gas. Merchant Energy also expects the purchase to aid El Paso Production Company in its efforts to ensure that its production reaches the best-value markets in the country. Additionally, the capacity purchase will aid Merchant Energy's strategy of becoming the fuel supplier of choice for the rapidly growing power generation market in the western United States and Mexico. Finally, as new pipelines enter the Midwestern market in the coming months, Merchant Energy plans to use the newly acquired capacity to meet gas demands in California as Canadian gas is diverted to the Midwest.

"This transaction is yet another example of the continuing development of the intellectual capital side of our business," said Greg Jenkins, president of El Paso Merchant Energy. "Our sophisticated understanding of the macro economics behind shifting North American gas flow patterns combined with our skills in option modeling will allow us to extract the maximum value from this capacity, now and across the life of the contract. We are confident that we will benefit from this capacity as natural gas becomes increasingly prominent in the power generation fuel mix."

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 January 18, 2000, El Paso Energy announced that it has agreed to merge with The Coastal Corporation in a deal valued at $16 billion, including approximately $6 billion of assumed debt and preferred equity. 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.