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                                                                   EXHIBIT 10.15

                                                                  EXECUTION COPY

                                SPONSOR AGREEMENT
                                -----------------
                         (El Paso Energy Partners, L.P.)


         SPONSOR AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this "Sponsor Agreement"), dated as of August 23, 2000 made by EL
PASO ENERGY PARTNERS, L.P. a Delaware limited partnership, (the "Sponsor"), to
THE CHASE MANHATTAN BANK, as Administrative Agent for the Lenders under the
Credit Agreement referred to below (in such capacity, "Administrative Agent"),
and to the Lenders. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to such terms in the Credit Agreement (as
defined below).

                                    RECITALS

         A.       ARGO, L.L.C., a Delaware limited liability company (the
                  "Company"), the Administrative Agent and the financial
                  institutions that are or may from time to time become a party
                  thereto (each a "Lender" and, collectively, the "Lenders")
                  have entered into that certain Credit Agreement dated as of
                  August 23, 2000 (as amended, supplemented or otherwise
                  modified from time to time, the "Credit Agreement"), pursuant
                  to which the Lenders will make loans to the Company for the
                  purpose of financing the cost of developing, constructing,
                  owning, operating, and maintaining the Project and certain
                  related expenses.

         B.       It is a condition precedent to the obligations of the Lenders
                  under the Credit Agreement that the Sponsor shall have
                  executed and delivered to the Administrative Agent this
                  Sponsor Agreement.

         NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make loans under the Credit Agreement, the Sponsor hereby agrees
as follows:

         SECTION 1. Agreement to Make Certain Payments. The Sponsor hereby
agrees that upon the occurrence and continuance of an Event of Default pursuant
to Section 6.01(a) of the Credit Agreement with respect to the payment of the
principal of the Term Loans outstanding on the Final Maturity Date (or earlier
upon an acceleration of maturity under the Credit Agreement), then the Sponsor
will pay to the Administrative Agent, upon demand, for the benefit of the
Lenders, an amount equal to the unpaid principal amount of the Term Loans not to
exceed the lesser of (a) $30,000,000 and (b) the aggregate amount of all
distributions received by any of the Sponsor, the Parent or any Subsidiary of
the Sponsor from the Company at any time prior to the Final Maturity Date (all
such obligations being the "Clawback Obligation") irrespective of whether the
Sponsor has received the proceeds of any such distributions and agrees to pay
any and all expenses (including any reasonable attorneys' fees and expenses)
incurred by the Administrative Agent, its successors, transferees and assigns in
enforcing any rights under this Sponsor Agreement. Without limiting the
generality of the foregoing, the Sponsor's liability shall continue so long as
the Term Loans are or would be owed by the Company to the Administrative Agent
but for the fact that any obligation of the Company is or may be unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Company or for any other reason. For purposes of
determining when an obligation is "due" for

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purposes of this Sponsor Agreement, such term shall be interpreted to mean due
in accordance with the terms of this Sponsor Agreement as in effect on the date
hereof and without regard to the amendment, modification or rejection of the
Credit Agreement or the Term Loans in any bankruptcy or other reorganization
proceeding. In the event that any payments are made by the Sponsor in
satisfaction of the Clawback Obligation pursuant to this Section 1, the
$30,000,000 maximum amount of the Sponsor's performance guarantee of the
Company's obligations under the Material Project Documents to which it is a
party as described in Section 2(a) and (c) below shall be reduced by the amount
of such payments on a dollar for dollar basis.

         SECTION 2. Certain Party Guaranties. The Sponsor hereby absolutely,
unconditionally and irrevocably guarantees, for the benefit of the
Administrative Agent and the other Secured Parties, the following obligations:

                  (a) Company Obligations. The due and punctual performance and
observance by the Company and each of its Subsidiaries of each of their
respective obligations under each Material Project Document to which it is a
party.

                  (b) Parent Obligations. The due and punctual payment,
performance and observance of the obligations of the Parent under the LLC
Agreement, including, without limitation, the obligations to contribute the
Construction Equity Contribution Amount and the Contingent Equity Contribution
Amount.

                  (c) Claims Against the Company Obligations Guaranty. In the
event that the Administrative Agent, on behalf of the Secured Parties, makes a
claim against the Sponsor pursuant to Section 2(a) above, and the Sponsor
satisfies such claim with a payment of cash or acceptable cash equivalents to
the Administrative Agent, for the benefit of the Secured Parties, the amount of
all such payments made in satisfaction of Section 2(a) shall not exceed
$30,000,000 in the aggregate. In the event that any such payments in
satisfaction of the obligations of the Sponsor pursuant to Section 2(a) are made
by the Sponsor, the $30,000,000 maximum amount of the Clawback Obligation
described in Section 1 above shall be reduced by the amount of such payments on
a dollar for dollar basis. In addition, if any claim is made by the
Administrative Agent against the Sponsor pursuant to Section 2(a) and such claim
remains unremedied after a period of 10 days following the date of written
notice of such claim from the Administrative Agent to the Sponsor or such claim
is satisfied by a payment of cash or acceptable cash equivalents pursuant to
Section 2(a), then the Company's ability to make any Restricted Payments
pursuant to Section 6.06 of the Credit Agreement shall be terminated until the
Construction Loan Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder or under the other
Financing Documents shall have been paid in full.

         SECTION 3. Obligation Absolute. The Sponsor agrees that its obligations
hereunder will be paid or performed strictly in accordance with the terms
hereof, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of the rights of the Company with respect
thereto. The obligations of the Sponsor under this Sponsor Agreement are
independent of the obligation of the Company to pay the Loans, and a separate
action or actions may be brought and prosecuted against the Sponsor to enforce
this Sponsor Agreement, irrespective of whether any action is brought against
the Company or any of its Affiliates or whether the Company or any of its
Affiliates is joined in any such action or actions. The liability of the Sponsor
under this Sponsor Agreement shall be absolute, unconditional, irrevocable and
continuing irrespective of:

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                  (a) any lack of validity or enforceability of the Credit
Agreement, any Project Document, any Security Document, any other Financing
Document or any agreement or instrument executed and delivered in connection
therewith;

                  (b) any change in the time, manner or place of payment of, or
in any other term of, or any other amendment or waiver of or any consent to
departure from the Credit Agreement;

                  (c) any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Loans;

                  (d) any change, restructuring or termination of the corporate
structure or existence of the Company or any of its Affiliates or the Sponsor or
any of the Subsidiaries of any one of them;

                  (e) the genuineness, validity, regularity, enforceability or,
except as otherwise provided in Section 3(b), any future amendment of, or change
in the Credit Agreement, any Project Document, any Security Document, any other
Financing Document or any other agreement, document or instrument to which the
Company or any of its Affiliates and/or such Sponsor is or are or may become a
party;

                  (f) the absence of any action to enforce this Sponsor
Agreement or the Credit Agreement, any Project Document, any Security Document
or any other Financing Document or the waiver or consent by the Administrative
Agent or the Lenders with respect to any of the provisions thereof;

                  (g) any bankruptcy, insolvency, reorganization, arrangement,
adjustment, composition, liquidation or the like of the Company or any of its
Affiliates or any of the Subsidiaries of any one of them;

                  (h) any circumstance which might constitute a defense
available to, or a discharge of, the Company or any of its Affiliates or a
surety;

                  (i) any sale, transfer or other disposition (i) by the Sponsor
of any stock or equity interest of any of its Subsidiaries or any of its
Affiliates; or (ii) by the Company of any stock or equity interest of any of its
Affiliates or its Subsidiaries;

                  (j) whether the Administrative Agent shall have taken or
failed to have taken any steps to collect or enforce any obligation or liability
from, or shall have otherwise exercised any rights, powers or remedies against
the Company or any other Person;

                  (k) any lack of genuineness, authorization, validity, legality
or enforceability of the Credit Agreement, any Project Document, any Security
Document or any other Financing Document for any reason, or the disaffirmance or
rejection or purported disaffirmance or purported rejection of the Credit
Agreement, any Project Document, any Security Document or any other Financing
Document in any insolvency, bankruptcy or reorganization proceedings relating to
the Company or otherwise;

                  (l) any law, regulation or decree now or hereafter in effect
which might in any manner affect any of the terms or provisions of the Credit
Agreement, any Project Document, any Security Document or any other Financing
Document, or any of the Company's rights, powers or remedies thereunder, or
which

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might cause or permit to be invoked any alteration in the time, amount or manner
of payment or performance of any of the Company's obligations and liabilities
thereunder;

                  (m) whether the Company shall have taken or failed to have
taken any steps to mitigate its damages;

                  (n) any other circumstances which might otherwise constitute a
defense available to or a discharge of the Company in respect of its obligations
or liabilities under the Credit Agreement, any Project Document, or any Security
Document or the other Financing Documents;

                  (o) any other act or omission to act by the Company or any
other Person;

                  (p) any failure of the Company to comply with Governmental
Requirements;

                  (q) any Default under the Credit Agreement;

                  (r) the merger or consolidation of the Company into or with
any corporation or other entity, or the sale by the Company of all or any part
of its assets; or

                  (s) any other circumstances (including, without limitation,
any statute of limitations) that might otherwise constitute a defense available
to, or a discharge of, the Sponsor or the Company or any of its Affiliates.

This Sponsor Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Sponsor's Clawback
Obligation or any other obligations hereunder is rescinded or must otherwise be
returned upon the insolvency, bankruptcy or reorganization of the Sponsor or
otherwise, all as though such payment had not been made.

         SECTION 4. Waivers. (a) The Sponsor hereby expressly waives all rights
it may have now or in the future under any statute, or at common law, or at law
or in equity, or otherwise, to compel the Administrative Agent to proceed in
respect of the Loans against the Company or any of its Affiliates or any other
party or against any security for the payment and performance of the Loans
before proceeding against, or as a condition to proceeding against, the Sponsor.
The Sponsor agrees that any notice or directive given at any time to the
Administrative Agent which is inconsistent with the waiver in the immediately
preceding sentence shall be null and void and may be ignored by the
Administrative Agent, and, in addition, may not be pleaded or introduced as
evidence in any litigation relating to this Sponsor Agreement for the reason
that such pleading or introduction would be at variance with the written terms
of this Sponsor Agreement. It is agreed between the Sponsor and the
Administrative Agent that the foregoing waivers are of the essence in connection
with the transactions contemplated by the Credit Agreement and that, but for
this Sponsor Agreement and such waivers, the Lenders would decline to make the
Loans under the Credit Agreement.

                  (b) The Sponsor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Clawback Obligation,
the other obligations under this Sponsor Agreement, the Loans, or this Sponsor
Agreement and any requirement that the Administrative Agent or any other Person
protect, secure, perfect or insure any lien or any property subject thereto or
exhaust any right

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or take any action against the Company or any of its Affiliates or any other
person or pursue any other remedy in the power of the Sponsor or the
Administrative Agent.

                  (c) The Sponsor hereby irrevocably waives any defense arising
by reason of any claim or defense based upon an election of remedies by the
Administrative Agent which in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, contribution or reimbursement rights, if any,
or other rights to proceed against the Company or any of its Affiliates, any
other guarantor or any other person.

                  (d) The Sponsor hereby irrevocably waives until the
Termination Date (as defined below), any claim or other rights which it may now
or hereafter acquire against the Company or any of its Affiliates that arises
from the existence, payment, performance or enforcement of the Sponsor's
obligations under this Sponsor Agreement, or any agreements or instruments
executed and delivered in connection herewith and therewith, including, without
limitation, any right (direct or indirect) of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Company or any of its Affiliates against the
Administrative Agent which the Administrative Agent now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including without limitation, the right to take
or receive from the Company or any of its Affiliates, directly or indirectly, in
cash or other property or by set-off or in any other manner, payment or security
on account of such claim, remedy or other rights. If any amount shall be paid to
the Sponsor in violation of this Sponsor Agreement at any time prior to the
later of (i) the payment in full of the Clawback Obligation and other amounts
payable under this Sponsor Agreement in cash and (ii) the date upon which all of
the Loans under the Credit Agreement shall have been indefeasibly paid (after
giving effect to any extensions thereof from time to time, the "Termination
Date"), such amount shall be deemed to have been paid to the Sponsor for the
benefit of, and held in trust for the benefit of, the Administrative Agent, and
shall forthwith be paid to the Administrative Agent to be credited and applied
to the Clawback Obligation and all other amounts payable under this Sponsor
Agreement, whether matured or unmatured.

         SECTION 5. Representations and Warranties. The Sponsor makes the
following representations and warranties, which shall survive the execution and
delivery of this Sponsor Agreement and the consummation of the transactions
contemplated hereby:

                  (a) Organization of Sponsor. The Sponsor is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Sponsor is in good standing in all jurisdictions
where necessary in light of the business it conducts or the properties it owns
and the transactions contemplated by the Sponsor Agreement, except where the
failure to be in good standing could not reasonably be expected to have a
material and adverse effect on the assets, liabilities, financial condition or
operations of the Sponsor and its Subsidiaries on a consolidated basis. The
Sponsor has the full power, authority and legal right to conduct its business as
it is presently conducted, and to execute, deliver and perform its obligations
under this Sponsor Agreement and to carry out the terms hereof and the
transactions contemplated hereby.

                  (b) Authorization. The execution, delivery and performance by
the Sponsor of this Sponsor Agreement have been duly authorized by all necessary
action.


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                  (c) Execution and Delivery; Binding Agreement. This Sponsor
Agreement has been duly executed and delivered by the Sponsor, is in full force
and effect and constitutes the legal, valid and binding obligation of the
Sponsor enforceable against the Sponsor in accordance with its terms, except as
the enforceability thereof may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity.

                  (d) Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Sponsor, threatened by or against the Sponsor or any of its
Subsidiaries, or against any of its or their respective properties, rights or
assets (i) with respect to this Sponsor Agreement, the Credit Agreement, the
other Financing Documents, the Project Documents or the EPN Security Documents
or any of the transactions contemplated hereby or thereby, or (ii) which could
reasonably be expected to have a Material Adverse Effect.

                  (e) Compliance with Other Instruments, etc. The execution,
delivery and performance by the Sponsor of this Sponsor Agreement and the
consummation of the transactions contemplated hereby will not result in any
violation of, breach of or default under any term of its charter or by-laws, or
of any contract or agreement to which it is a party or by which it or its
property is bound, or of any license, permit, franchise, judgment, writ,
injunction, decree, order, charter, law, ordinance, rule or regulation
applicable to it, except for any such violations which, individually or in the
aggregate, would not materially and adversely affect the performance by the
Sponsor of its obligations under this Sponsor Agreement.

                  (f) Government Consent. No consent, order, authorization,
waiver, approval or any other action, or registration, declaration or filing
with, any Governmental Authority or any other Person is required to be obtained
by the Sponsor in connection with the execution, delivery, performance, validity
or enforceability of this Sponsor Agreement or the consummation of the
transactions contemplated hereunder.

                  (g) Investment Company Act. None of the Sponsor, the Company
nor any El Paso Entity is an "investment company" or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940, as amended.

                  (h) Utility Regulation. None of the Sponsor, the Company nor
any El Paso Entity is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.

                  (i) Financial Statements. The consolidated balance sheet of
the Sponsor and its consolidated Subsidiaries as at March 31, 2000, and the
related consolidated statements of operations and cash flows for the three
months ended March 31, 2000, present fairly the consolidated financial condition
of the Sponsor and its Subsidiaries as at each such date and the consolidated
results of their operations and their consolidated cash flows for the three
month period then ended. All such financial statements, including the related
schedules and notes, if any, thereto, were prepared in accordance with GAAP
applied consistently throughout the period involved.

                  (j) Material Adverse Change. There has been no development or
event since March 31, 2000 which has had or could reasonably be expected to have
a Material Adverse Effect.

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                  (k) Priority. The Clawback Obligation of the Sponsor set forth
in Section 1 hereof ranks in priority of payment pari passu with the
Indebtedness of the Sponsor under the EPN Credit Agreement.

                  (l) EPN Credit Agreement. No Default or Event of Default under
the EPN Credit Agreement has occurred and is continuing.

         SECTION 6. Covenants of Sponsor. The Sponsor covenants and agrees with
the Administrative Agent, for the benefit of the Secured Parties, that from and
after the date hereof and so long as this Sponsor Agreement shall remain in
effect:

                  (a) Merger, Sale, etc. If the Sponsor is a party to a merger
or consolidation in which the Sponsor is not the surviving entity, or sells all
or substantially all of its assets, then the surviving corporation or the Person
to which such sale has been made, as the case may be, shall confirm by an
instrument in writing satisfactory to the Administrative Agent its assumption of
the obligations and liabilities of the Sponsor hereunder.

                  (b) Separate Existence. The Sponsor will, and will cause each
of the Parent and the Company, to comply with the following undertakings:

                           (i) the Sponsor and its Affiliates that are owners of
         capital stock, membership interest, or other equity interest in the
         Company or holders of any Subordinated Indebtedness of the Company
         shall maintain separate records and books of account from those of
         Company;

                           (ii) the Sponsor and its Affiliates that are owners
         of capital stock, membership interest, or other equity interest in the
         Company or holders of any Subordinated Indebtedness of the Company
         shall maintain its records and books of account in such a manner that
         it would not be difficult or costly to segregate, ascertain, or
         otherwise identify its assets and liabilities separate and distinct
         from the assets and liabilities of the Company;

                           (iii) funds and other assets of the Sponsor's and its
         Affiliates' that are owners of capital stock, membership interest, or
         other equity interest in the Company or holders of any Subordinated
         Indebtedness of the Company shall not be commingled with the funds and
         other assets of the Company;

                           (iv) the Sponsor and its Affiliates that are owners
         of capital stock, membership interest, or other equity interest in the
         Company or holders of any Subordinated Indebtedness of the Company
         shall not conduct its own business in the name of the Company;

                           (v) except as otherwise set forth in this Sponsor
         Agreement and in the other Financing Documents, the Sponsor and its
         Affiliates that are owners of capital stock, membership interest, or
         other equity interest in the Company or holders of any Subordinated
         Indebtedness of the Company shall not pay for the liabilities of the
         Company out of the funds of the Sponsor and such Affiliates;

                           (vi) any financial transaction between the Sponsor
         and its Affiliates that are owners of capital stock, membership
         interest, or other equity interest in the Company or holders of any

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         Subordinated Indebtedness of the Company, on the one hand, and the
         Company on the other hand, shall, except as otherwise provided in the
         Financing Documents, be on terms no less favorable to the Company than
         terms the Company could obtain with third parties and shall reflect the
         separate identity and legal existence of each such entity;

                           (vii) representatives and agents of the Company
         (whether or not they are "loaned" employees of the Sponsor or its
         Affiliates that are owners of capital stock, membership interest, or
         other equity interest in the Company or holders of any Subordinated
         Indebtedness of the Company) will, when purporting to act on behalf of
         the Company, hold themselves out to third parties as being
         representatives or agents of the Company, and will use stationery and
         checks that so reflect;

                           (viii) the Sponsor and each of its Affiliates that
         are owners of capital stock, membership interest, or other equity
         interest in the Company or holders of any Subordinated Indebtedness of
         the Company shall not use stationery, invoices and checks bearing the
         name of the Company; and

                           (ix) the Sponsor and each of its Affiliates that are
         owners of capital stock, membership interest, or other equity interest
         in the Company or holders of any Subordinated Indebtedness of the
         Company shall hold itself out as a separate entity, distinct from the
         Company.

                  (c)  Company Bankruptcy. The Sponsor will not consent to, vote
                       for, or otherwise cause or permit (or permit any of its
                       Affiliates, to consent to, or vote for, or otherwise
                       cause or permit) the Company voluntarily to take any
                       action that would result in the voluntary bankruptcy of
                       the Company.

                  (d)  Reporting Requirements.  The Sponsor will:

                           (i) Quarterly Reporting. As soon as available, but in
         any event within 60 days after the end of each of the first three
         quarterly periods of each Fiscal Year of the Company, furnish to the
         Administrative Agent, the unaudited consolidated and consolidating
         balance sheet of the Sponsor and its consolidated Subsidiaries as at
         the end of such quarter and the related unaudited consolidated and
         consolidating statements of income and retained earnings and of cash
         flows of the Sponsor and its consolidated Subsidiaries for such quarter
         and the portion of the Fiscal Year through the end of such quarter,
         setting forth in each case in comparative form the figures for the
         previous year, certified by a Responsible Officer (as defined below) of
         the Sponsor as being fairly stated in all material respects when
         considered in relation to the consolidated and consolidating financial
         statements of the Sponsor and its consolidated Subsidiaries (subject to
         normal year-end audit adjustments).

                           (ii) Annual Reporting. As soon as available, but in
         any event within 120 days after the end of each Fiscal Year, furnish to
         the Administrative Agent, a copy of the consolidated balance sheet of
         the Sponsor and its consolidated Subsidiaries as at the end of such
         year and the related consolidated statements of income and retained
         earnings and of cash flows for such year, setting forth in each case in
         comparative form the figures for the previous year, reported on without
         a "going concern" or like qualification or exception, or qualification
         arising out of the scope of the audit, by

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         PriceWaterhouseCoopers LLP or other independent certified public
         accountants of nationally recognized standing.

                           (iii) Compliance Certificate. Concurrently with the
         delivery of the financial statements for any Fiscal Year described in
         Section 6(d)(i) and (ii) above, deliver to the Administrative Agent a
         certificate of the Chief Executive Officer, Chief Operating Officer,
         the President, the Chief Financial Officer, the Treasurer or any vice
         president of the general partner of the Sponsor (each, a "Responsible
         Officer"), (A) stating that, to such Responsible Officer's knowledge,
         the Sponsor and its Subsidiaries during such period have observed and
         performed all of their respective covenants and other agreements, and
         satisfied every condition, contained in this Agreement, the EPN Credit
         Agreement and the other Loan Documents (as defined in the EPN Credit
         Agreement) to be observed, performed or satisfied by them, and that
         such Responsible Officer has obtained no knowledge of any Default or
         Event of Default except as specified in such certificate, and (B)
         certifying that such financial statements fairly present the Sponsor's
         and its Subsidiaries' consolidated financial condition and results of
         the operations of the Sponsor at the date and for the period indicated
         therein, subject to changes resulting from year-end audit adjustments.

                           (iv) EPN Loan Documents. Promptly, in any event no
         later than after the furnishing thereof to the EPN Lenders under the
         EPN Credit Agreement and the other Loan Documents (as defined in the
         EPN Credit Agreement), deliver to the Administrative Agent a written
         notice of the occurrence of any Default or Event of Default under the
         EPN Credit Agreement.

                           (v) Stockholder & Public Information. Within five
         days after the same are sent, deliver copies of all financial
         statements and reports which the Sponsor sends to the holders of its
         Capital Stock (as defined in the EPN Credit Agreement), and within five
         days after the same are filed, copies of all financial statements and
         reports which the Sponsor may make to, or file with, the Securities
         Exchange Commission or any successor or analogous Government Authority.

                           (vi) Certain Events. Promptly after a Responsible
         Officer of the Sponsor obtains knowledge of the occurrence of any
         Default hereunder, deliver to the Administrative Agent notice of such
         occurrence together with a detailed statement by a Responsible Officer
         of the Sponsor of the steps being taken by the Sponsor or the
         appropriate Subsidiary of the Sponsor to cure the effect of such event.

                           (vii) Other Information. Deliver such other
         information (including non-financial information) as the Administrative
         Agent or any Lender may reasonably request.

         SECTION 7. Amendments, Etc. No amendment or waiver of any provision of
this Sponsor Agreement and no consent to any departure by the Sponsor therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Administrative Agent with consent of the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

         SECTION 8. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy, telex or
cable communication) and mailed, telegraphed, telecopied, telexed, cabled or
delivered, if to the Sponsor to El Paso Energy Partners, L.P., 1001 Louisiana,

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26th Floor, Houston, Texas 77002, Telecopier Number: (713) 420-5477, Attention:
Keith Forman, or if to the Administrative Agent, as provided in the Section 8.01
of the Credit Agreement, or as to any party at such other address as shall be
designated by such party in a written notice to each other party complying as to
delivery with the terms of this Section 8. All such communications shall be
deemed to have been duly given when transmitted by telex or telecopier,
delivered to the telegraph or cable office or personally delivered or, in the
case of a mailed notice, three (3) Business Days after the date deposited in the
mails, postage prepaid, in each case given or addressed as aforesaid.

         SECTION 9.  No Waiver; Remedies.  No failure on the part of
Administrative Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

         SECTION 10. Continuing Guaranty. This Sponsor Agreement is a continuing
guaranty and shall (a) remain in full force and effect until the Termination
Date, (b) be binding upon the Sponsor, its successors and assigns and (c) inure
to the benefit of and be enforceable by the Administrative Agent and its
successors, indorsees, transferees and assigns.

         SECTION 11. GOVERNING LAW. THIS SPONSOR AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO ITS CONFLICT OF LAW PRINCIPLES OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS OF LAW).

         SECTION 12. Jurisdiction, Etc.  The Sponsor hereby irrevocably and
unconditionally:

                  (a) submits for itself and its property in any legal action or
proceeding relating to this Sponsor Agreement and the other Financing Documents
to which it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;

                  (b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

                  (c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered mail (or
substantially similar form of mail), postage prepaid, to the Sponsor at its
address set forth in Section 8 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

                  (d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and

                  (e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary or punitive

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<PAGE>   11

damages (including, without limitation, damages arising from the use of
electronic, telecommunications or other information transmissions systems in
connection with the Financing Documents).

         SECTION 13. Assignment. All covenants and other agreements and
obligations in this Sponsor Agreement shall (a) be binding upon the Sponsor and
its successors, but the Sponsor may not assign its obligations hereunder without
the consent of the Administrative Agent and the Required Lenders, except
pursuant to a merger or consolidation not prohibited by the EPN Credit
Agreement, and (b) inure to the exclusive benefit of, and be enforceable by, the
Administrative Agent and any Secured Party, and, in each case, by its respective
permitted successors, transferees and assigns (including any assignee for
security purposes or Person holding a security interest herein).

         SECTION 14. Counterparts. This Sponsor Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. This Sponsor
Agreement may be delivered by facsimile transmission of the relevant signature
pages hereof.

         SECTION 15. Survival of Representations, Warranties and Indemnities;
Entire Agreement. All representations, warranties and indemnities and
undertakings to pay costs and expenses contained herein shall survive (a) the
execution and delivery of this Sponsor Agreement, (b) the completion of the
performance by (i) the Company of the Obligations, (ii) (iii) each other El Paso
Entity of its obligations under the Project Documents or the Financing Documents
to which it is a party and (c) except as contemplated by Section 13(a), the
Transfer (whether or not a Permitted Transfer) by the Parent of all or a portion
of its Membership Interest in the Company or any termination of its status as
the Managing Member pursuant to the LLC Agreement, and may be relied upon by any
Secured Party, or any assignee of such Secured Party permitted hereunder,
regardless of any investigation made at any time by or on behalf of any Secured
Party or any such assignee.

         SECTION 16. Severability. Every provision of this Sponsor Agreement
that is prohibited by or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

         SECTION 17. No Third-Party Beneficiaries. This Sponsor Agreement is
intended for the exclusive benefit of the Administrative Agent and the Secured
Parties and no other Person shall have any rights hereunder, whether as a third-
party beneficiary or otherwise.

                  IN WITNESS WHEREOF, the Sponsor has caused this Sponsor
Agreement to be duly executed and delivered by an officer thereunto duly
authorized as of the date first above written.

                                       EL PASO ENERGY PARTNERS, L.P.



                                       By:  /s/ James Lytal
                                            ------------------------------------
                                       Name:    James Lytral
                                       Title:   President


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