HOUSTON, TEXAS, January 27, 2000—El Paso Energy International, a business unit of El Paso Energy Corporation (NYSE:EPG), announced today that it had signed a ten-year power supply agreement with Eletronorte, a Brazilian government-owned power generator and distributor. Under the agreement, El Paso Energy International will supply 64 megawatts (MW) of electric power to the city of Porto Velho in the State of Rondonia. El Paso, which has a 40-percent stake in the $60 million project, will start construction immediately in order to begin to supply the city in July of this year.

The project is the first phase of a two-phase project to supply electrical power to the region, the prime soybean production area of Brazil. The second phase, which will add over 200 MW of gas turbine-based capacity, will complete the electrical supply and give impetus to the development of indigenous natural gas resources and a related natural gas pipeline. El Paso expects to participate in Phase II development.

El Paso Energy International is an active participant in the Brazilian energy market and an investor in the Bolivia to Brazil natural gas pipeline. The company also owns over 400 MW of operating power generation in the State of Amazonas. Recently, El Paso Energy International signed a power supply agreement for a 480-MW power project in southern Brazil and the formation of a joint venture with General Electric to develop, build, own, and operate 2,000 MW of electric generating capacity in Brazil's most populous southern states.

"The Porto Velho project expands El Paso's power portfolio in Brazil, further solidifying our position as the premier independent power generator in the Amazon region," said John D. Hushon, president of El Paso Energy International. "It is another opportunity for us to make natural gas and electricity more affordable and accessible to the people of Brazil. We are pleased to move forward with our strategy in Latin America by developing additional power generating infrastructure in one of the fastest growing markets on the continent."

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.