El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Merchant Energy Completes Purchase of Pipeline Capacity on El Paso Natural Gas System
HOUSTON, TEXAS, February 15, 2000ŚEláPaso
Merchant Energy Company, a business unit of EláPaso Energy Corporation (NYSE:EPG),
announced today that it has completed the purchase of 1,248,975 MMBtu/d of capacity from
EláPaso Natural Gas Company, also a unit of EláPaso Energy. The capacity was
purchased for a fifteen-month period beginning Marchá1,á2000 and ending May 31,
2001 at a purchase price of $38.5 million.
The capacity purchase will further enable EláPaso 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 EláPaso 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 EláPaso 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, EláPaso Energy Corporation provides
comprehensive energy solutions through its strategic business units: Tennessee Gas
Pipeline Company, EláPaso Natural Gas Company, Southern Natural Gas Company,
EláPaso Merchant Energy Company, EláPaso Energy International Company,
EláPaso Field Services Company, and EláPaso 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, EláPaso 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
EláPaso 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.