HOUSTON, TEXAS, February 3, 2000—El Paso Energy (NYSE:EPG) announced today that its business unit, El Paso Natural Gas, and Enron North America have agreed to terminate effective January 31, 2000 the one-year, $38 million contract for 1.2 Bcf of capacity that Enron entered into in December of last year. This capacity had been awarded to Enron North America after they outbid a prearranged transaction posted on El Paso's electronic bulletin board. While the Federal Energy Regulatory Commission (FERC) approved the negotiated transaction despite the protests of parties, the FERC modified the delivery point rights of this capacity in a way that was not acceptable to Enron North America. El Paso will resubscribe this capacity through an open season starting February 7.

"El Paso believes the value of this capacity continues to increase with the ongoing clockwise shift in North American gas deliveries and that the resubscription revenues will not differ materially from the expected revenues under the Enron North America contract," said John W. Somerhalder II, president of El Paso Energy's Pipeline Group. "It is unfortunate that the recent FERC order modified the capacity rights in a way that will not allow the capacity to serve the purpose that Enron North America originally intended when they outbid the prearranged transaction. In the interest of fairness and good customer relations, we have agreed to release them from the contract."

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.