El Paso In Process of Restoring Gulf of Mexico Production

El Paso provided an updated assessment on the impact of Hurricane Katrina on its Gulf of Mexico operations. El Paso is pleased to report that all of its employees in the affected region have been located. Many of those employees lost their homes, and they are now receiving temporary housing and supplies from the company. Support activities for these employees continue.

Interstate Natural Gas Pipeline Operations

Approximately 3 billion cubic feet per day was initially shut-in on El Paso's three natural gas pipeline systems in the Gulf of Mexico as a result of Hurricane Katrina. Currently, there are 700 million cubic feet per day (MMcf/d) of production shut-in on Tennessee Gas Pipeline (TGP) and 550 MMcf/d on Southern Natural Gas (SNG). ANR Pipeline has returned to full capacity.

Onshore, TGP has begun to assess the damage at its Port Sulphur compressor station as high water in the area has receded. Offshore, TGP has several confirmed and suspected leaks in its pipelines, and diving operations are currently underway to inspect them and assess damage. Inspections and surveys of other lines are expected to take several weeks.

Flood waters have receded at SNG's Toca Compressor Station and initial assessments are beginning. The assessments include investigations of compressor units, liquids handling and dehydration facilities, piping, and other equipment.

Initial aerial damage assessments have been completed for all of SNG's offshore facilities. The most serious damage to offshore facilities appears to be primarily to pipeline risers on three third-party production platforms that have been destroyed and to measurement equipment at some locations. SNG has also identified damage to its junction platform at Main Pass 298. Complete damage assessments will require on-site investigation.

Initial surveys of SNG's sub-sea pipelines are underway. Based on preliminary information, the company is not aware of any significant damage to SNG's offshore pipelines. However, the assessment is in its early stages.

The timing of additional pipeline volumes becoming available is difficult to predict given the uncertainty of potential subsea repairs on TGP, the ongoing evaluation of producers' platforms upstream of El Paso's pipelines, and the potential for processing constraints if third-party processing facilities are not available.

Production Operations

El Paso's production in the Gulf of Mexico, which was 205 million cubic feet equivalent per day (MMcfe/d) before the storm, is now nearly 170 MMcfe/d. Restoring the remaining production is largely dependent on the timing of repairs to properties operated by third parties. One El Paso platform located at West Delta 137 was destroyed in the storm, but that unmanned platform accounted for only 1 MMcfe/d, net to the company.

Midstream Operations

As previously reported, El Paso's south Louisiana gathering and processing assets have returned to operational status.

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