El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Energy Announces Divestiture to Fulfill Federal Trade Commision Merger Requirements
Houston, Texas, January 6, 2000ŚEláPaso Energy
Corporation (NYSE:EPG) announced today that it has entered into agreements for the
divestiture of three pipeline systems as required by the Federal Trade Commission (FTC) in
its approval of EláPaso's merger with Sonat Inc. in October 1999. All three
sales, totaling approximately $620 million, are expected to close in the first quarter of
2000, subject to FTC approval.
Duke Energy Gas Transmission has agreed to purchase EláPaso Energy
Corporation's East Tennessee Natural Gas Company for a total consideration of $386.3
million. The 1,100-mile natural gas pipeline system, with a design capacity of 700 million
cubic feet of gas per day, serves the states of Tennessee, Virginia, and Georgia.
CMS Trunkline Gas Company, a subsidiary of CMS Energy Corporation (NYSE:CMS), has
agreed to purchase EláPaso Energy Corporation's Sea Robin Pipeline Company for
$72 million plus a transition service agreement. Sea Robin, a 1ábillion cubic feet
per day capacity, 445-mile natural gas and condensate pipeline, is located primarily in
the Gulf of Mexico offshore Louisiana.
EláPaso Energy Corporation has also entered into an agreement with a third buyer
for the sale of its one-third interest in Destin Pipeline Company L.L.C. for $160 million.
This agreement is subject to the first right of refusal of the interest by EláPaso
Energy's partners in the venture. The Destin system, with a design capacity of 1
billion cubic feet per day, transports gas from deepwater areas in the eastern Gulf of
"The FTC required the sale of these assets in connection with its approval of our
merger with Sonat," said William A. Wise, president and chief executive officer of El
Paso Energy Corporation. "We are pleased with the terms of these transactions and do
not anticipate problems or delays with the FTC approval. The process of merging the two
companies into the preeminent natural gas company in North America has been completed, and
we are moving forward to realize the opportunities this merger has created."
With over $15 billion in assets, EláPaso Energy Corporation provides comprehensive
energy solutions through its strategic business units: EláPaso Natural Gas Company,
Tennessee Gas Pipeline Company, Southern Natural Gas Company, EláPaso Field Services
Company, EláPaso Merchant Energy Company, EláPaso Production Company, and
EláPaso Energy International 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, gas gathering and processing, gas and oil
production, power generation, merchant energy services, and international project
development. 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