HOUSTON, TEXAS, February 15, 2000—El Paso Natural Gas Company, a business unit of El Paso Energy Corporation (NYSE:EPG), has awarded 1,248,975 MMBtu/d of capacity on its system to El Paso Merchant Energy-Gas, L.P., also a unit of El Paso Energy Corporation, for $38.5 million for the fifteen month period March 1, 2000 through May 31, 2001.

The award of capacity is the result of an open posting on El Paso Natural Gas Company's electronic bulletin board that was held from Monday, February 7, 2000 through Monday, February 14, 2000. Twenty-five bids were submitted for part or all of the available capacity of 1,248,975 MMBtu/d that was offered for the period March 1, 2000 through May 31, 2001.

After evaluating the bids under the methodology disclosed in the posting, El Paso Merchant Energy-Gas, L.P. was awarded the 1,248,975 MMBtu/d of capacity for a term extending from March 1, 2000 through May 31, 2001.

"We are pleased to have successfully concluded this open season," said Patricia A. Shelton, president of El Paso Natural Gas Company. "With the level of interest that was expressed in this competitive bidding process, the market has once again confirmed the value of this capacity. We believe the value of El Paso Natural Gas' capacity will increase even further as the clockwise shift in North American gas deliveries continues into the future."

Due to the requirements of El Paso Natural Gas' tariff, the award was in three contracts. The contracts can be seen on El Paso Natural Gas' electronic bulletin board beginning tomorrow morning and on El Paso Energy Corporation's web page (www.epenergy.com) later this week.

This is the fourth time El Paso Natural Gas has sold this capacity. For 1998 and 1999, Dynegy Energy Marketing bought this capacity after various postings on El Paso Natural Gas' electronic bulletin board. Then in December 1999, the capacity was sold to an undisclosed party under a pre-arranged deal which was posted on El Paso Natural Gas' electronic bulletin board. Enron North America was subsequently awarded the capacity after submitting a higher bid for the capacity. After the Federal Energy Regulatory Commission modified certain provisions of the contract, El Paso Natural Gas and Enron North America terminated the sale after only one month—January 2000.

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.