El Paso and COPEL Sign Letter of Intent for Sale of Araucaria Power Plant

HOUSTON, Feb. 17 /PRNewswire-FirstCall/ -- El Paso Corporation announced today that it has entered into a Letter of Intent with COPEL (Companhia Paranaense de Energia) for the sale of El Paso's interest in the Araucaria power plant in Brazil and the settlement of a dispute over that plant.

Under the terms of the Letter of Intent, El Paso will receive $190 million in exchange for its 60-percent ownership of the plant. Additionally, pending Petrobras' formal approval, El Paso and COPEL, as co-owners with Petrobras of the plant, agreed that legal proceedings which currently exist in the courts of Brazil and in international arbitration will be suspended. El Paso hopes to complete the sale of the Araucaria plant in the first half of the year.

"Today's announcement represents another step forward for our Brazilian power business," said Doug Foshee, president and chief executive officer of El Paso Corporation. "The sale will allow us to recover our initial investment in the Araucaria plant, sharpening our focus on the significant potential of our exploration and production program in Brazil."

El Paso Corporation provides natural gas and related energy products in a safe, efficient, and dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. For more information, visit http://www.elpaso.com/ .

Editors Note: The Araucaria plant is a combined-cycle, 484-megawatt, natural gas-fired power plant located in the Parana State, Brazil. El Paso first entered into a 20-year power purchase agreement with COPEL in May of 2000.

Cautionary Statement Regarding Forward-Looking Statements

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, including, without limitation, the ability to implement and achieve our objectives in our 2006 financial and operational plan; inability to realize anticipated synergies and cost savings associated with restructurings and divestitures on a timely basis; inability of El Paso and COPEL to agree upon the terms of the definitive agreements to transfer our interests in the power plant facilities; inability to satisfy any conditions precedent to completing the sale, including the inability to obtain any necessary approvals or consents; and other factors described in the company's (and its affiliates') Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.

First Call Analyst: Bruce L. ConneryFCMN Contact: