Houston, Texas, January 15, 1998-El Paso Energy Corporation (NYSE:EPG) announced today that the $35 million dollar Samalayuca Pipeline is operational and flowing clean-burning natural gas into Mexico.

El Paso Natural Gas Company and El Paso Energy International Company, business units of El Paso Energy Corporation, are partnered with Pemex Gas Y Petroquimica Basica in a 50/50 joint venture agreement. The 45-mile pipeline project, which includes 22 miles of pipe in the United States and 23 miles of pipe in Mexico, has a capacity of 212 MMBtu/d.

Pipeline operations began on December 20, 1997, initially transporting 70 million cubic feet a day (MMcf/d) of natural gas to the Samalayuca I natural gas-fired power plant in Northern Mexico and to consumers in the state of Chihuahua. The Samalayuca II Power Plant will begin receiving gas supplies this year as it becomes operational in three phases.

"The international partnership between El Paso Energy and Pemex is an historic accomplishment and creates the basis for a prosperous future for both sides of the border," said William A. Wise, chairman, president, and chief executive officer of El Paso Energy. "This pipeline will provide the necessary fuel to the Samalayuca Power plants to generate much needed electricity for the people of Mexico."

The Samalayuca pipeline will transport natural gas from El Paso Natural Gas Company's Hueco Compressor Station, located east of El Paso. The gas will continue south across the border approximately 30 miles to the Samalayuca I and II Power Plants. The pipeline will supply the energy demands of the cities of Juarez, Mexico and Chihuahua, Mexico and provide gas at a competitive price for consumers.

The Mexico portion of the pipeline, known as Gasoductos de Chihuahua, is the first privately owned and operated natural gas pipeline in Mexico. The construction of the pipeline was the result of an international public bid by the Comisión Federal de Electricidad (CFE), who requested transportation service of 172 MMcf/d of natural gas through a pipeline that would transport this energy from the United States to the Samalayuca Power plants. In addition, Pemex Gas Y Petroquimica Basica will transport 40 MMcf/d for customers on its system.

The transportation system is managed through a Supervisory Control And Data Acquisition (SCADA) system, which will be controlled and operated remotely from the El Paso Natural Gas operations control center. This system measures the flow in real time at each measurement station, obtaining information on the conditions and physical characteristics of the gas such as composition, temperature, heat value and pressure.

El Paso Energy Corporation provides total energy solutions through five business units: El Paso Natural Gas Company, Tennessee Gas Pipeline Company, El Paso Field Services Company, El Paso Energy Marketing Company and El Paso Energy International Company. With offices worldwide, the company has operations in interstate natural gas transmission, gas gathering and processing, energy marketing, and international energy infrastructure development.

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 companies have 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 companies make these statements and projections in good faith, neither the companies nor their managements can guarantee that the anticipated future results will be achieved. Reference should be made to the companies' (and their affiliates') Securities and Exchange Commission filings for additional important factors that may affect actual results.