1. Doug Foshee
President & Chief Executive Officer
Bank of America
Investment Conference
September 19, 2006
the place to work
the neighbor to have
the company to own
2. Cautionary Statement Regarding
Forward-looking Statements
This presentation 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 presentation, including, without limitation, changes in unaudited and/or unreviewed financial information; our ability to
implement and achieve our objectives in the 2006 plan, including achieving our debt-reduction, earnings and cash flow targets; the
effects of any changes in accounting rules and guidance; our ability to meet production volume targets in our Exploration and
Production segment despite delays in resuming production shut-in due to hurricanes Rita and Katrina; uncertainties and potential
consequences associated with the outcome of governmental investigations, including, without limitation, those related to the
reserve revisions and natural gas hedge transactions; the outcome of litigation, including shareholder derivative and class actions
related to reserve revisions and restatements; our ability to comply with the covenants in our various financing documents; our
ability to obtain necessary governmental approvals for proposed pipeline projects and our ability to successfully construct and
operate such projects; the risks associated with recontracting of transportation commitments by our pipelines; regulatory
uncertainties associated with pipeline rate cases; actions by the credit rating agencies; our ability to successfully exit the energy
trading business; our ability to close our announced asset sales on a timely basis; changes in commodity prices for oil, natural gas,
and power and relevant basis spreads; inability to realize anticipated synergies and cost savings associated with restructurings and
divestitures on a timely basis; general economic and weather conditions in geographic regions or markets served by the company
and its affiliates, or where operations of the company and its affiliates are located; the uncertainties associated with governmental
regulation; political and currency risks associated with international operations of the company and its affiliates; competition; 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.
Non-GAAP Financial Measures
El Paso uses the non-GAAP financial measure “earnings before interest expense and income taxes” or “EBIT” to assess the
operating results and effectiveness of the company and its business segments. The company defines EBIT as net income (loss)
adjusted for (i) items that do not impact its income (loss) from continuing operations, such as extraordinary items, discontinued
operations, and the impact of accounting changes; (ii) income taxes; (iii) interest and debt expense; and (iv) distributions on
preferred interests of consolidated subsidiaries. The company defines EBITDA as EBIT plus Depreciation, Depletion and
Amortization.
2
3. Our Purpose
El Paso Corporation provides
natural gas and related energy
products in a safe, efficient, and
dependable manner
3
4. Leading Natural Gas Pipelines
Great Lakes Gas
► 26% total U.S. Transmission (50%)
Wyoming
interstate pipeline
Interstate
mileage
Colorado
Cheyenne
Interstate Gas
► 1/3 of daily U.S. Plains Pipeline
throughput
Tennessee
Mojave
Gas Pipeline
Pipeline ANR
► Best market
Pipeline
connectivity Southern
Natural Gas
► Best supply access
El Paso
Elba Island
Natural Gas
► Leading pipeline LNG
integrity program
Mexico
Ventures
Florida Gas
Transmission (50%)
4
5. Overview
■ Pipelines having terrific year
• EBIT up 13% for first six months
• Despite positive items last year, hurricane costs
this year
■ Expansion inventory continues to build
■ 4%–6% EBITDA growth over next 3–5 years
■ But, equally focused on safety, integrity of
pipelines
5
6. El Paso Pipelines
Total Integrity Management Program (TIM)
■ Developed TIM in 2001, before Pipeline Safety Act
■ Adopted best practices of El Paso, Sonat, and
Coastal inspection and maintenance programs
■ Combined operations into one organization
■ Program approved by Board of Directors
■ Regular reviews by Health, Environmental, & Safety
BOD committee
Industry-leading program
6
7. Total Integrity Management Program
As of August 2006
Total Integrity
Category Mileage Management Program
Onshore ≥ 6quot; 42,798 In-line Inspection Program
Offshore 2,060 Offshore Integrity Program
Storage 373 Storage Integrity Program
< 6quot; 1,517 Area site-specific plans direct assessment
New lines 613 Lines installed from 2003 forward are not
counted in the mileage; they will be ILI’d
within 10 years of in-service
Total 47,361
7
8. In-line Inspection Program Status
42,798 ILI Program Miles
45,000
40,000
35,000
72%
66%
30,000 63%
Miles
58%
25,000 52%
46%
20,000 42%
15,000
10,000
5,000
0
Pre-2001 2001 2002 2003 2004 2005 2006E
Cumulative 1st ILI Annual 1st time ILI
Cumulative repeat ILI Annual repeat ILI
8
10. Pipeline Safety Improvement Act
■ Signed by President Bush December 17, 2002
■ Key points:
• Identify high consequences areas (HCAs)
• Develop integrity management program (IMP for HCAs)
• Perform ongoing assessments of pipeline integrity (ILI,
hydro-testing, direct assessment)
• Data integration and risk assessment
• Implement additional preventive and mitigated action
■ Program completion Milestones
• Top 50% HCAs: December 17, 2007
• Remaining 50%: December 12, 2012
10
11. Comparison of Rule and
Total Integrity Management Program
Rule TIM
Scope Limited to HCA’s All facilities
(1,902 sites and ILI >6quot; onshore (42,798 miles)
approx. 1,234 miles)
Timing 50%: December 2007 100%: December 2012
100%: December 2012
Assessments ILI, Hydro, Direct Assessment Primarily ILI and site specific plans
■
Threats Original focus internal and external
External corrosion
corrosion
■ Internal corrosion
■ Stress corrosion cracking
■ Manufacturing
■ Construction
■ Operator error
■ Third party damage
■ Weather and outside forces
■ Equipment
11
13. In-line Inspection Program
Year 1
Make piggable Year 2
In-line inspect
Immediate repairs
Year 3 and 4
Remediate
Annual overlap:
■ Make piggable
■ ILI previous year make piggable
■ Address any immediate repairs from ILI run
■ Remediate scheduled anomalies
13
14. Make Piggable: Scope and Obstacles
Scope
■ Install pig launchers and receivers
■ Replace main line valves as required
• Generally plug or reduced size
Address Obstacles
■ An area where the tool cannot pass through
■ Managing outages
14
15. Launcher/Receiver
A launcher/receiver is installed to insert,
launch, and/or receive pigs/tools
15
16. Valve Setting
Most original valves will not allow pigs to
pass—These must be replaced
16
17. Obstacles: What about Rivers?
■ Most river crossings were built
with a header and multiple line
crossings
■ These are replaced
• Conventionally, or
• Directional drill, or
• Install traps at river
17
18. Obstacles: Gas Operations and Engineering
■ Some lines cannot
be taken out of
service
• Important laterals
and some
mainlines
Use Stopple—Bypass
18
21. Magnetic Flux Leakage Principle
Each MagneScan
tool carries powerful
permanent magnets
which are coupled to
the pipe wall by
high-density
brushes, to induce a
magnetic field in the
pipeline steel
21
22. Magnetic Flux Leakage Principle
When the tool
passes a location
where the amount
of metal in the pipe
wall has been
decreased—by a
corrosion pit, for
example—a leakage
of magnetic flux
takes place
22
23. Commitment to Integrity
■ Committed to industry-leading program
■ Established accountabilities and continuous
improvement objectives
■ Developed aggressive and comprehensive
strategy and programs to achieve our objectives
■ Committed the resources to implement the
program through a continuous program
23
25. Unprecedented Growth
Growth project portfolio approximately $3 Billion
TGP NE ConneXion TGP Essex-
ANR Wisconsin 2006 New England Middlesex
ANR STEP $47 MM
WIC/CP Opal to $111 MM $38 MM
$95 MM
WIC Kanda Lateral November 2006
Cheyenne or Greensburg November 2007 November 2007
2007/08
Up to $137 MM 168 MMcf/d
$39–$63 MM 136 MMcf/d 82 MMcf/d
27 Bcf / 412 MMcf/d
January 2008 January 2008
Up to 333 MMcf/d 125 Mdth/d
TGP NE ConneXion
Front Range
WIC Piceance Pipeline CPG Yuma Lateral NY/NJ
Market Delivery
$134MM $22 MM $26 MM
Infrastructure
March 2006 November 2006 November 2006
$148 MM
333 MMcf/d 49 MMcf/d 42 MMcf/d
2008/2009
CIG Raton Basin SNG Elba Expansion II
Expansions $158 MM
$91MM February 2006
2005-2008 360 MMcf/d
170 MMcf/d Continental
EPNG
Connector SNG Elba Expansion
Arizona Storage
$TBD III & Elba Express
$115 MM
2008 $850 MM
2010
850MMcf/d 2010 - 2012
3.5Bcf / 350 MMcf/d
8.4 Bcf / 900 MMcfd
Mexico JV- LPG
SNG Cypress Phase I / II
EPNG Sonora Lateral Reynosa
$241 MM / $18 MM
$91MM $53 MM (50%)
May 2007 / Mid 2008
2009/10 July 2007
220 MMcf/d / 116 MMcf/d
800 MMcf/d 30,000 Bbl/d TGP/ANR
Eugene Island 371 FGT Phase VII – Part I and II
$16 MM
Mexico JV - Sonora $63 MM / $0 MM
Nov - Dec 2006
$406 MM (33%) May 2007 / May 2008
200 MMcf/d
2010 60 MMcf/d / 20 MMcf/d
1,000-1,250 MMcf/d
TGP SNG Cypress
LA Deepwater Link Phase III
$31 MM $61 MM
FERC Certificated/Under Construction April 2007 May 2010
850 MMcf/d 164 MMcf/d
Signed PA’s Future Projects
25
26. Doug Foshee
President & Chief Executive Officer
Bank of America
Investment Conference
September 19, 2006
the place to work
the neighbor to have
the company to own
