El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Natural Gas Company Announces Plans to Purchase Pipeline
HOUSTON, TEXAS, February 3, 2000ŚEláPaso
Natural Gas Company, a business unit of EláPaso Energy Corporation (NYSE:EPG),
announced today that it has entered into an agreement with Plains All American Pipeline,
L.P. and All American Pipeline,áL.P. for the purchase of a portion of the All
American Pipeline for $129ámillion. The purchase is subject to approval from the
Federal Trade Commission.
The 1,223-mile, 30-inch pipeline was built in the mid-1980s as a crude oil
transportation system and runs from McCamey, Texas to Santa Barbara, California.
EláPaso will purchase the portion of the pipeline from McCamey, Texas to Emidio
Station near Bakersfield, CaliforniaŚa total of 1,088 miles. The purchase also
includes any fiber optic rights that All American possesses for the entire
1,233ámiles of pipe.
EláPaso Natural Gas Company plans to invest $75 million to convert a
segment of the pipeline, which runs from McCamey, Texas to the California border, from an
oil pipeline to a natural gas pipeline upon Federal Energy Regulatory Commission approval.
The conversion will allow EláPaso Natural Gas to replace existing natural gas
compression facilities with more efficient pipeline looping, reducing operating,
maintenance, and fuel costs for its customers. On the east end of EláPaso's
system, the pipeline will allow greater inlet capability in response to the increasing
flows on the southern system. The converted pipeline is planned to go into service during
the first quarter 2001.
"The purchase of these facilities presents EláPaso Natural Gas
with a unique opportunity to add additional flexibility on its pipeline system that is
both operating expense and fuel efficient," said Patricia A. Shelton, president of
EláPaso Natural Gas Company. "This purchase helps ready EláPaso Natural Gas
for the coming decade with efficiency gains to accommodate the clockwise shift in the flow
of gas in North America. We believe the acquisition of this portion of the
AlláAmerican Pipeline adds to the value of EláPaso's position in the
premier natural gas markets of the Southwest and California."
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.