##### Table of Contents


















Form 10-Q




[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2005


OR


[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period
from           to


Commission File Number 1-2700





El Paso Natural Gas Company




|                                                                                                      |  |                                                   
|----------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware(State or Other Jurisdiction
    of Incorporation or Organization)                            |  | 74-0608280(I.R.S. Employer
    Identification No.)
|                                                                                                     
|El Paso Building
    1001 Louisiana Street
    Houston, Texas(Address of Principal Executive Offices) |  | 77002(Zip Code)                                   

(713) 420-2600


þ o


o þ


o þ






EL PASO NATURAL GAS
COMPANY MEETS THE CONDITIONS OF GENERAL INSTRUCTION H(1)(a) AND
(b) TO FORM 10-Q AND IS THEREFORE FILING THIS REPORT WITH A
REDUCED DISCLOSURE FORMAT AS PERMITTED BY SUCH INSTRUCTION.










---










EL PASO NATURAL GAS COMPANY


TABLE OF CONTENTS


|                                             |  |                                                                                                                                    |  |      |    | 
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                             |  | Caption                                                                                                                            |  | Page |   
|                                             |  |                                                                                                                                    |  |      |   
|                                             |  | PART I  Financial Information                                                                                                     |  |      |    | 
|Item 1.                                      |  | Financial Statements                                                                                                               |  |      | 1  | 
|Item 2.                                      |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                          |  |      | 12 | 
|                                             |  | Cautionary Statements for Purposes of the
    Safe Harbor Provisions of the Private Securities
    Litigation Reform Act of 1995 |  |      | 16 | 
|Item 3.                                      |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                                     |  |      | *  | 
|Item 4.                                      |  | Controls and Procedures                                                                                                            |  |      | 16 | 
|                                             |  | PART II  Other Information                                                                                                        |  |      |    | 
|Item 1.                                      |  | Legal Proceedings                                                                                                                  |  |      | 18 | 
|Item 2.                                      |  | Unregistered Sales of Equity Securities and
    Use of Proceeds                                                                    |  |      | *  | 
|Item 3.                                      |  | Defaults Upon Senior Securities                                                                                                    |  |      | *  | 
|Item 4.                                      |  | Submission of Matters to a Vote of Security
    Holders                                                                            |  |      | *  | 
|Item 5.                                      |  | Other Information                                                                                                                  |  |      | 18 | 
|Item 6.                                      |  | Exhibits                                                                                                                           |  |      | 18 | 
|                                             |  | Signatures                                                                                                                         |  |      | 19 | 
|Certification of PEO Pursuant to Section 302
|Certification of CFO Pursuant to Section 302
|Certification of PEO Pursuant to Section 906
|Certification of CFO Pursuant to Section 906








|  |                                                                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | We have not included a response to this item in this document
    since no response is required pursuant to the reduced disclosure
    format permitted by General Instruction H to Form 10-Q.



|     |  |                                
|---- |  | -------------------------------
|/d   |  | = per day                      
|BBtu |  | = billion British thermal units
|Bcf  |  | = billion cubic feet           
|MMcf |  | = million cubic feet           





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PART I  FINANCIAL INFORMATION





Item 1. Financial Statements


EL PASO NATURAL GAS COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(In millions)


(Unaudited)


|                                |                                          |               |     |             |               |   |     |      |  |   |      |     |   |   |     |     |  
|------------------------------- | ---------------------------------------- | ------------- | --- | ----------- | ------------- | - | --- | ---- |  | - | ---- | --- | - | - | --- | --- | -
|                                |                                          |               |     | Nine Months |              
|                                |                                          | Quarter Ended |     |             | Ended         |  
|                                |                                          | September 30, |     |             | September 30, |  
|                                |                                          |               |     |             |               |  
|                                |                                          | 2005          |     |             | 2004          |   |     | 2005 |  |   | 2004 |    
|                                |                                          |               |     |             |               |   |     |      |  |   |      |    
|Operating revenues              |                                          | $             | 125 |             |               | $ | 130 |      |  | $ | 371  |     |   | $ | 384 |    
|                                |                                          |               |     |             |               |   |     |      |  |   |      |    
|Operating expenses              |                                          |               |     |             |               |   |     |      |  |   |      |     |   |   |     |    
|                                | Operation and maintenance                |               |     | 79          |               |   |     | 45   |  |   |      | 170 |   |   |     | 120 |  
|                                | Depreciation, depletion and amortization |               |     | 19          |               |   |     | 19   |  |   |      | 56  |   |   |     | 54  |  
|                                | Gain on long-lived assets                |               |     |            |               |   |     |     |  |   |      | (2  | ) |   |     | (1  | )
|                                | Taxes, other than income taxes           |               |     | 8           |               |   |     | 7    |  |   |      | 24  |   |   |     | 23  |  
|                                |                                          |               |     |             |               |   |     |      |  |   |      |    
|                                |                                          |               | 106 |             |               |   | 71  |      |  |   | 248  |     |   |   | 196 |    
|                                |                                          |               |     |             |               |   |     |      |  |   |      |    
|Operating income                |                                          |               | 19  |             |               |   | 59  |      |  |   | 123  |     |   |   | 188 |    
|Other income, net               |                                          |               | 2   |             |               |   | 2   |      |  |   | 6    |     |   |   | 5   |    
|Interest and debt expense       |                                          |               | (23 | )           |               |   | (23 | )    |  |   | (69  | )   |   |   | (68 | )  
|Affiliated interest income, net |                                          |               | 9   |             |               |   | 5   |      |  |   | 22   |     |   |   | 14  |    
|                                |                                          |               |     |             |               |   |     |      |  |   |      |    
|Income before income taxes      |                                          |               | 7   |             |               |   | 43  |      |  |   | 82   |     |   |   | 139 |    
|Income taxes                    |                                          |               | 2   |             |               |   | 11  |      |  |   | 31   |     |   |   | 41  |    
|                                |                                          |               |     |             |               |   |     |      |  |   |      |    
|Net income                      |                                          | $             | 5   |             |               | $ | 32  |      |  | $ | 51   |     |   | $ | 98  |    
|                                |                                          |               |     |             |               |   |     |      |  |   |      |    



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EL PASO NATURAL GAS COMPANY


CONDENSED CONSOLIDATED BALANCE SHEETS


(In millions, except share amounts)


(Unaudited)


|                                       |                                                                                           |                                                    |                                            |       |              |       |       |       |    |       | 
|-------------------------------------- | ----------------------------------------------------------------------------------------- | -------------------------------------------------- | ------------------------------------------ | ----- | ------------ | ----- | ----- | ----- | -- | ----- | 
|                                       |                                                                                           | September 30,                                      |                                            |       | December 31, |      
|                                       |                                                                                           | 2005                                               |                                            |       | 2004         |      
|                                       |                                                                                           |                                                    |                                            |       |              |      
|ASSETS                                
|Current assets                         |                                                                                           |                                                    |                                            |       |              |       |       |      
|                                       | Cash and cash equivalents                                                                 |                                                    | $                                          |      |              |       | $     | 1     |   
|                                       | Accounts and notes receivable                                                             |                                                    |                                            |       |              |       |       |       |   
|                                       |                                                                                           | Customer, net of allowance of $18 in 2005 and 2004 |                                            |       | 76           |       |       |       | 73 |      
|                                       |                                                                                           | Affiliates                                         |                                            |       | 10           |       |       |       | 38 |      
|                                       |                                                                                           | Other                                              |                                            |       | 1            |       |       |       | 3  |      
|                                       | Taxes receivable                                                                          |                                                    |                                            | 78    |              |       |       | 102   |   
|                                       | Materials and supplies                                                                    |                                                    |                                            | 40    |              |       |       | 41    |   
|                                       | Deferred income taxes                                                                     |                                                    |                                            | 33    |              |       |       | 27    |   
|                                       | Other                                                                                     |                                                    |                                            | 14    |              |       |       | 19    |   
|                                       |                                                                                           |                                                    |                                            |       |              |      
|                                       |                                                                                           |                                                    | Total current assets                       |       |              | 252   |       |       |    | 304   | 
|                                       |                                                                                           |                                                    |                                            |       |              |      
|Property, plant and equipment, at cost |                                                                                           |                                                    | 3,355                                      |       |              |       | 3,355 |      
|                                       | Less accumulated depreciation, depletion and amortization                                 |                                                    |                                            | 1,197 |              |       |       | 1,222 |   
|                                       |                                                                                           |                                                    |                                            |       |              |      
|                                       |                                                                                           |                                                    | Total property, plant and equipment, net   |       |              | 2,158 |       |       |    | 2,133 | 
|                                       |                                                                                           |                                                    |                                            |       |              |      
|Other assets                           |                                                                                           |                                                    |                                            |       |              |       |       |      
|                                       | Note receivable from affiliate                                                            |                                                    |                                            | 823   |              |       |       | 702   |   
|                                       | Other                                                                                     |                                                    |                                            | 86    |              |       |       | 86    |   
|                                       |                                                                                           |                                                    |                                            |       |              |      
|                                       |                                                                                           |                                                    | 909                                        |       |              |       | 788   |      
|                                       |                                                                                           |                                                    |                                            |       |              |      
|                                       |                                                                                           |                                                    | Total assets                               |       | $            | 3,319 |       |       | $  | 3,225 | 
|                                       |                                                                                           |                                                    |                                            |       |              |      
|LIABILITIES AND STOCKHOLDERS EQUITY  
|Current liabilities                    |                                                                                           |                                                    |                                            |       |              |       |       |      
|                                       | Accounts payable                                                                          |                                                    |                                            |       |              |       |       |       |   
|                                       |                                                                                           | Trade                                              |                                            | $     | 42           |       |       | $     | 36 |      
|                                       |                                                                                           | Affiliates                                         |                                            |       | 19           |       |       |       | 16 |      
|                                       |                                                                                           | Other                                              |                                            |       | 4            |       |       |       | 4  |      
|                                       | Short-term borrowings                                                                     |                                                    |                                            | 7     |              |       |       | 7     |   
|                                       | Taxes payable                                                                             |                                                    |                                            | 34    |              |       |       | 29    |   
|                                       | Accrued interest                                                                          |                                                    |                                            | 23    |              |       |       | 25    |   
|                                       | Contractual deposits                                                                      |                                                    |                                            | 8     |              |       |       | 11    |   
|                                       | Other                                                                                     |                                                    |                                            | 37    |              |       |       | 11    |   
|                                       |                                                                                           |                                                    |                                            |       |              |      
|                                       |                                                                                           |                                                    | Total current liabilities                  |       |              | 174   |       |       |    | 139   | 
|                                       |                                                                                           |                                                    |                                            |       |              |      
|Long-term debt                         |                                                                                           |                                                    | 1,110                                      |       |              |       | 1,110 |      
|                                       |                                                                                           |                                                    |                                            |       |              |      
|Other liabilities                      |                                                                                           |                                                    |                                            |       |              |       |       |      
|                                       | Deferred income taxes                                                                     |                                                    |                                            | 372   |              |       |       | 359   |   
|                                       | Other                                                                                     |                                                    |                                            | 99    |              |       |       | 104   |   
|                                       |                                                                                           |                                                    |                                            |       |              |      
|                                       |                                                                                           |                                                    | 471                                        |       |              |       | 463   |      
|                                       |                                                                                           |                                                    |                                            |       |              |      
|Commitments and contingencies          |                                                                                           |                                                    |                                            |       |              |       |       |      
|Stockholders equity                   |                                                                                           |                                                    |                                            |       |              |       |       |      
|                                       | Common stock, par value $1 per share; 1,000 shares
    authorized, issued and outstanding |                                                    |                                            |      |              |       |       |      |   
|                                       | Additional paid-in capital                                                                |                                                    |                                            | 1,267 |              |       |       | 1,267 |   
|                                       | Retained earnings                                                                         |                                                    |                                            | 297   |              |       |       | 246   |   
|                                       |                                                                                           |                                                    |                                            |       |              |      
|                                       |                                                                                           |                                                    | Total stockholders equity                 |       |              | 1,564 |       |       |    | 1,513 | 
|                                       |                                                                                           |                                                    |                                            |       |              |      
|                                       |                                                                                           |                                                    | Total liabilities and stockholders equity |       | $            | 3,319 |       |       | $  | 3,225 | 
|                                       |                                                                                           |                                                    |                                            |       |              |      



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EL PASO NATURAL GAS COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(In millions)


(Unaudited)


|                                        |                                                                               |                                          |                                                     |     |      |      |     |      |      |      |  
|--------------------------------------- | ----------------------------------------------------------------------------- | ---------------------------------------- | --------------------------------------------------- | --- | ---- | ---- | --- | ---- | ---- | ---- | -
|                                        |                                                                               | Nine Months Ended                        |                                                    
|                                        |                                                                               | September 30,                            |                                                    
|                                        |                                                                               |                                          |                                                    
|                                        |                                                                               | 2005                                     |                                                     |     | 2004 |     
|                                        |                                                                               |                                          |                                                     |     |      |     
|Cash flows from operating activities    |                                                                               |                                          |                                                     |     |      |      |     |     
|                                        | Net income                                                                    |                                          | $                                                   | 51  |      |      | $   | 98   |     
|                                        | Adjustments to reconcile net income to net cash from operating
    activities |                                          |                                                     |     |      |      |     |      |     
|                                        |                                                                               | Depreciation, depletion and amortization |                                                     |     | 56   |      |     |      | 54   |     
|                                        |                                                                               | Deferred income taxes                    |                                                     |     | 7    |      |     |      | 110  |     
|                                        |                                                                               | Gain on long-lived assets                |                                                     |     | (2   | )    |     |      | (1   | )   
|                                        |                                                                               | Asset and liability changes              |                                                     |     | 58   |      |     |      | (678 | )   
|                                        |                                                                               |                                          |                                                     |     |      |     
|                                        |                                                                               |                                          | Net cash provided by (used in) operating activities |     |      | 170  |     |      |      | (417 | )
|                                        |                                                                               |                                          |                                                     |     |      |     
|Cash flows from investing activities    |                                                                               |                                          |                                                     |     |      |      |     |     
|                                        | Additions to property, plant and equipment                                    |                                          |                                                     | (80 | )    |      |     | (103 | )   
|                                        | Net change in restricted cash                                                 |                                          |                                                     |    |      |      |     | 443  |     
|                                        | Net change in affiliate advances                                              |                                          |                                                     | (93 | )    |      |     | (17  | )   
|                                        | Other                                                                         |                                          |                                                     | 2   |      |      |     | (5   | )   
|                                        |                                                                               |                                          |                                                     |     |      |     
|                                        |                                                                               |                                          | Net cash provided by (used in) investing activities |     |      | (171 | )   |      |      | 318  |  
|                                        |                                                                               |                                          |                                                     |     |      |     
|Cash flows from financing activities    |                                                                               |                                          |                                                     |     |      |      |     |     
|                                        | Capital contributions                                                         |                                          |                                                     |    |      |      |     | 73   |     
|                                        |                                                                               |                                          |                                                     |     |      |     
|                                        |                                                                               |                                          | Net cash provided by financing activities           |     |      |     |     |      |      | 73   |  
|                                        |                                                                               |                                          |                                                     |     |      |     
|Net change in cash and cash equivalents |                                                                               |                                          | (1                                                  | )   |      |      | (26 | )   
|Cash and cash equivalents               |                                                                               |                                          |                                                     |     |      |      |     |     
|                                        | Beginning of period                                                           |                                          |                                                     | 1   |      |      |     | 26   |     
|                                        |                                                                               |                                          |                                                     |     |      |     
|                                        | End of period                                                                 |                                          | $                                                   |    |      |      | $   |     |     
|                                        |                                                                               |                                          |                                                     |     |      |     



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EL PASO NATURAL GAS COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


1. Basis of Presentation and Significant Accounting
Policies


Basis of Presentation




New Accounting
Pronouncements Issued But Not Yet Adopted




Accounting for Asset Retirement Obligations. Accounting for
Conditional Asset Retirement Obligations Accounting for Asset
Retirement Obligations


Accounting for Pipeline Integrity Costs.


2. Debt and Credit Facilities


Debt




Credit Facilities




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3. Commitments and Contingencies


Legal Proceedings


Sierra Pacific Resources and Nevada Power Company v.
El Paso et al.


IMC Chemicals (IMCC) v. El Paso Marketing, L.P.
(EPM), et al.


Phelps Dodge vs. EPNG.


Shareholder Class Action Suit. Marilyn Clark v.
Byron Allumbaugh, David A. Arledge, John M. Bissell,
Juan Carlos Braniff, James F. Gibbons, Anthony W.
Hall, Ronald L. Kuehn, J. Carleton MacNeil, Thomas
McDade, Malcolm Wallop, William Wise, Joe B. Wyatt,
El Paso Natural Gas Company and El Paso Merchant
Energy Company


Carlsbad.


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Baldonado et al. vs. EPNG Baldonado


Grynberg. In re: Natural Gas Royalties Qui Tam
Litigation


Will Price (formerly Quinque). Will Price, et al. v. Gas
Pipelines and Their Predecessors, et al.,


Bank of America. Bank of America, et al. v. El Paso
Natural Gas Company, et al., Deane W. Moore, et al.
v. Burlington Northern, Inc., et al., Bank of America, et al. v. El Paso
Natural Gas and Burlington Resources Oil and Gas Company, El Paso Natural Gas Company v. Burlington Resources,
Inc. and Burlington Resources Oil and Gas Company,


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L.P.






Environmental Matters






|                                                 |  |   |    |  
|------------------------------------------------ |  | - | -- | -
|Balance at January 1, 2005                       |  | $ | 32 |  
|Additions/adjustments for remediation activities |  |   | 1  |  
|Payments for remediation activities              |  |   | (2 | )
|                                                 |  |   |   
|Balance at September 30, 2005                    |  | $ | 31 |  
|                                                 |  |   |   



CERCLA Matters.


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State of Arizona Chromium Review.




Rates and Regulatory Matters


CPUC Complaint Proceeding.


Rate Settlement.


Rate Case.


FERC Order 2004 Audit.


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CPUCs OIR Proceeding.






|              | 
|------------- | 
|Other Matters | 

Navajo Nation.


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| |           
| | ----------
| | Guarantees



4. Retirement Benefits




|                                      |  |               |    |             |               |   |    |      |  |   |      |   |  |   |    |  
|------------------------------------- |  | ------------- | -- | ----------- | ------------- | - | -- | ---- |  | - | ---- | - |  | - | -- | -
|                                      |  |               |    | Nine Months |              
|                                      |  | Quarter Ended |    |             | Ended         |  
|                                      |  | September 30, |    |             | September 30, |  
|                                      |  |               |    |             |               |  
|                                      |  | 2005          |    |             | 2004          |   |    | 2005 |  |   | 2004 |  
|                                      |  |               |    |             |               |   |    |      |  |   |      |  
|                                      |  | (In millions) |   
|Interest costs                        |  | $             | 1  |             |               | $ | 2  |      |  | $ | 3    |   |  | $ | 5  |  
|Expected return on plan assets        |  |               | (1 | )           |               |   | (1 | )    |  |   | (3   | ) |  |   | (3 | )
|Amortization of transition obligation |  |               | 2  |             |               |   | 2  |      |  |   | 6    |   |  |   | 6  |  
|Amortization of actuarial loss        |  |               |   |             |               |   |   |      |  |   |     |   |  |   | 1  |  
|                                      |  |               |    |             |               |   |    |      |  |   |      |  
|Net postretirement benefit cost       |  | $             | 2  |             |               | $ | 3  |      |  | $ | 6    |   |  | $ | 9  |  
|                                      |  |               |    |             |               |   |    |      |  |   |      |  

Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug, Improvement and Modernization Act of
2003.


5. Transactions with Affiliates


Cash Management Program.


Taxes.


Capital Contributions.


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Other Affiliate Balances.


|                     |  |               |   |  |              |   |   | 
|-------------------- |  | ------------- | - |  | ------------ | - | - | 
|                     |  | September 30, |   |  | December 31, |  
|                     |  | 2005          |   |  | 2004         |  
|                     |  |               |   |  |              |  
|                     |  | (In millions) |  
|Contractual deposits |  | $             | 6 |  |              | $ | 6 | 



Affiliate Revenues and Expenses.


|                                                           |  |               |    |             |               |   |    |      |  |   |      |  |  |   |    | 
|---------------------------------------------------------- |  | ------------- | -- | ----------- | ------------- | - | -- | ---- |  | - | ---- |  |  | - | -- | 
|                                                           |  |               |    | Nine Months |              
|                                                           |  | Quarter Ended |    |             | Ended         |  
|                                                           |  | September 30, |    |             | September 30, |  
|                                                           |  |               |    |             |               |  
|                                                           |  | 2005          |    |             | 2004          |   |    | 2005 |  |   | 2004 | 
|                                                           |  |               |    |             |               |   |    |      |  |   |      | 
|                                                           |  | (In millions) |   
|Revenues from affiliates                                   |  | $             | 5  |             |               | $ | 5  |      |  | $ | 13   |  |  | $ | 14 | 
|Operations and maintenance expenses from affiliates        |  |               | 19 |             |               |   | 17 |      |  |   | 53   |  |  |   | 44 | 
|Reimbursements of operating expenses charged to affiliates |  |               | 4  |             |               |   | 3  |      |  |   | 12   |  |  |   | 10 | 

11



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Item 2. Managements Discussion and Analysis
of Financial Condition and Results of Operations






Results of Operations




|                                |                  |                                      |       |             |               |   |       |      |  |   |       |     |  |   |       |     | 
|------------------------------- | ---------------- | ------------------------------------ | ----- | ----------- | ------------- | - | ----- | ---- |  | - | ----- | --- |  | - | ----- | --- | 
|                                |                  |                                      |       | Nine Months |              
|                                |                  | Quarter Ended                        |       |             | Ended         |  
|                                |                  | September 30,                        |       |             | September 30, |  
|                                |                  |                                      |       |             |               |  
|                                |                  | 2005                                 |       |             | 2004          |   |       | 2005 |  |   | 2004  |    
|                                |                  |                                      |       |             |               |   |       |      |  |   |       |    
|                                |                  | (In millions, except volume amounts) |      
|Operating revenues              |                  | $                                    | 125   |             |               | $ | 130   |      |  | $ | 371   |     |  | $ | 384   |    
|Operating expenses              |                  |                                      | (106  | )           |               |   | (71   | )    |  |   | (248  | )   |  |   | (196  | )  
|                                |                  |                                      |       |             |               |   |       |      |  |   |       |    
|                                | Operating income |                                      |       | 19          |               |   |       | 59   |  |   |       | 123 |  |   |       | 188 | 
|Other income, net               |                  |                                      | 2     |             |               |   | 2     |      |  |   | 6     |     |  |   | 5     |    
|                                |                  |                                      |       |             |               |   |       |      |  |   |       |    
|                                | EBIT             |                                      |       | 21          |               |   |       | 61   |  |   |       | 129 |  |   |       | 193 | 
|Interest and debt expense       |                  |                                      | (23   | )           |               |   | (23   | )    |  |   | (69   | )   |  |   | (68   | )  
|Affiliated interest income, net |                  |                                      | 9     |             |               |   | 5     |      |  |   | 22    |     |  |   | 14    |    
|Income taxes                    |                  |                                      | (2    | )           |               |   | (11   | )    |  |   | (31   | )   |  |   | (41   | )  
|                                |                  |                                      |       |             |               |   |       |      |  |   |       |    
|                                | Net income       |                                      | $     | 5           |               |   | $     | 32   |  |   | $     | 51  |  |   | $     | 98  | 
|                                |                  |                                      |       |             |               |   |       |      |  |   |       |    
|Throughput volumes (BBtu/d)     |                  |                                      | 4,332 |             |               |   | 4,432 |      |  |   | 4,160 |     |  |   | 4,189 |    
|                                |                  |                                      |       |             |               |   |       |      |  |   |       |    



|                                                                                        |                      |                         |    |      |                   |   |     |       |      |        |   |   |         |   |     |         |   |   |       |     |   |        |     |     |   |   |   |   |  |   |     |     |  
|--------------------------------------------------------------------------------------- | -------------------- | ----------------------- | -- | ---- | ----------------- | - | --- | ----- | ---- | ------ | - | - | ------- | - | --- | ------- | - | - | ----- | --- | - | ------ | --- | --- | - | - | - | - |  | - | --- | --- | -
|                                                                                        |                      | Quarter Ended           |    |      | Nine Months Ended |  
|                                                                                        |                      | September 30,           |    |      | September 30,     |  
|                                                                                        |                      |                         |    |      |                   |  
|                                                                                        |                      |                         |    | EBIT |                   |   |     |       | EBIT |       
|                                                                                        |                      | Revenue                 |    |      | Expense           |   |     | Other |      | Impact |   |   | Revenue |   |     | Expense |   |   | Other |     |   | Impact |    
|                                                                                        |                      |                         |    |      |                   |   |     |       |      |        |   |   |         |   |     |         |   |   |       |     |   |        |    
|                                                                                        |                      | Favorable/(Unfavorable) |    |      |                  
|                                                                                        |                      | (In millions)           |    |      |                  
|Gas not used in operations and revaluations                                             |                      | $                       | (5 | )    |                   | $ | (4  | )     |      | $      |  |   |         | $ | (9  | )       |   | $ | (15   | )   |   | $      | (10 | )   |   | $ |  |   |  | $ | (25 | )  
|Impact of capacity obligations to former full requirements
    customers                |                      |                         |   |      |                   |   |    |       |      |        |  |   |         |   |    |         |   |   | 5     |     |   |        |    |     |   |   |  |   |  |   | 5   |    
|Higher benefits and allocation of overhead and shared service
    costs from affiliates |                      |                         |   |      |                   |   | (3  | )     |      |        |  |   |         |   | (3  | )       |   |   |      |     |   |        | (14 | )   |   |   |  |   |  |   | (14 | )  
|Higher litigation
    accruals(2)                                                       |                      |                         |   |      |                   |   | (28 | )     |      |        |  |   |         |   | (28 | )       |   |   |      |     |   |        | (28 | )   |   |   |  |   |  |   | (28 | )  
|Other(1)                                                                                |                      |                         |   |      |                   |   |    |       |      |        |  |   |         |   |    |         |   |   | (3    | )   |   |        |    |     |   |   | 1 |   |  |   | (2  | )  
|                                                                                        |                      |                         |    |      |                   |   |     |       |      |        |   |   |         |   |     |         |   |   |       |     |   |        |     |    
|                                                                                        | Total impact on EBIT |                         | $  | (5   | )                 |   | $   | (35   | )    |        | $ |  |         |   | $   | (40     | ) |   | $     | (13 | ) |        | $   | (52 | ) |   | $ | 1 |  |   | $   | (64 | )
|                                                                                        |                      |                         |    |      |                   |   |     |       |      |        |   |   |         |   |     |         |   |   |       |     |   |        |     |    




|    |                                                                                     
|--- | ------------------------------------------------------------------------------------
|(1) | Consists of individually insignificant items.                                       
|(2) | For a discussion of our legal matters, see Item 1,
    Financial Statements, Note 3.

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##### Table of Contents





Gas Not Used in Operations and Revaluations.






Impact of Capacity Obligations to Former Full Requirements
Customers.


Allocated Costs.


Expansions.


13



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##### Table of Contents



Recontracting.


Accounting for Pipeline Integrity Costs.


Regulatory Matter.




Affiliated Interest Income, Net




| |                                                  
| | -------------------------------------------------
| | Third Quarter 2005 Compared to Third Quarter 2004





| |                                                          
| | ---------------------------------------------------------
| | Nine Months Ended 2005 Compared to Nine Months Ended 2004



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Income Taxes


|                   |  |                                 |    |             |               |   |    |      |  |   |      |   |  |   |    |  
|------------------ |  | ------------------------------- | -- | ----------- | ------------- | - | -- | ---- |  | - | ---- | - |  | - | -- | -
|                   |  |                                 |    | Nine Months |              
|                   |  | Quarter Ended                   |    |             | Ended         |  
|                   |  | September 30,                   |    |             | September 30, |  
|                   |  |                                 |    |             |               |  
|                   |  | 2005                            |    |             | 2004          |   |    | 2005 |  |   | 2004 |  
|                   |  |                                 |    |             |               |   |    |      |  |   |      |  
|                   |  | (In millions, except for rates) |   
|Income taxes       |  | $                               | 2  |             |               | $ | 11 |      |  | $ | 31   |   |  | $ | 41 |  
|Effective tax rate |  |                                 | 29 | %           |               |   | 26 | %    |  |   | 38   | % |  |   | 29 | %






Liquidity




Capital Expenditures




Commitments and Contingencies




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##### Table of Contents






CAUTIONARY STATEMENTS FOR PURPOSES OF THE SAFE
HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995











|        |                                                           
|------- | ----------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk








|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Material Weakness Previously Disclosed




Evaluation of Disclosure Controls and Procedures




Changes in Internal Control Over Financial Reporting






| |   |                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Implemented automated and manual controls for our primary
    financial system to monitor unauthorized password changes;                                                                                                                                  
|
| |  | Performed an in-depth analysis of our primary financial
    accounting system to examine existing functional access to
    identify any potentially incompatible duties and developed an
    enhanced segregation of duties matrix based on this analysis;
|
| |  | Modified our primary financial accounting system to eliminate or
    modify potentially conflicting functionality;                                                                                                                                        

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##### Table of Contents





| |   |                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Implemented a process to evaluate all new user access requests
    against segregation of duties matrices to ensure no new
    conflicts are created for our applications described above;
|
| |  | Separated security administration rights from system update
    capabilities for our applications described above; and                                                                    
|
| |  | Implemented monitoring procedures to monitor activities of
    security administration roles for our applications described
    above.                                                    





| |   |                                                                                         
| | - | ----------------------------------------------------------------------------------------
| |  | Conducted training on company-wide accounting policies;                                 
|
| |  | Improved our procedures for managing information systems
    changes; and               
|
| |  | Enhanced the automated controls over the preparation and posting
    of journal entries.



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##### Table of Contents






PART II  OTHER INFORMATION





Item 1. Legal Proceedings




Arizona Pipe-Coating.





Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds







Item 3. Defaults Upon Senior Securities







Item 4. Submission of Matters to a Vote of Security
Holders







Item 5. Other Information







Item 6. Exhibits




|        |      |    |  |  |             |                                                                                                            
|------- | ---- | -- |  |  | ----------- | -----------------------------------------------------------------------------------------------------------
|Exhibit |      |    |  |  |            
|Number  |      |    |  |  | Description
|        |      |    |  |  |            
|        | *31  | .A |  |  |             | Certification of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|        | *31  | .B |  |  |             | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.    
|        | **32 | .A |  |  |             | Certification of Principal Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.
|        | **32 | .B |  |  |             | Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.    





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We hereby undertake, pursuant to Regulation S-K,
    Item 601(b), paragraph (4)(iii), to furnish to the
    U.S. Securities and Exchange Commission, upon request, all
    constituent instruments defining the rights of holders of our
    long-term debt not filed herewith for the reason that the total
    amount of securities authorized under any of such instruments
    does not exceed 10 percent of our total consolidated assets.

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SIGNATURES






| |  |                            
| |  | ---------------------------
| |  | EL PASO NATURAL GAS COMPANY





| |                                    
| | -----------------------------------
| | /s/ JAMES J. CLEARY                
| |                                    
| | James J. Cleary                    
| | Chairman of the Board and President
| | (Principal Executive Officer)      



| |                                             
| | --------------------------------------------
| | /s/ GREG G. GRUBER                          
| |                                             
| | Greg G. Gruber                              
| | Senior Vice President,                      
| | Chief Financial Officer and Treasurer       
| | (Principal Financial and Accounting Officer)

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##### Table of Contents



EL PASO NATURAL GAS COMPANY


EXHIBIT INDEX




|        |      |    |  |  |             |                                                                                                            
|------- | ---- | -- |  |  | ----------- | -----------------------------------------------------------------------------------------------------------
|Exhibit |      |    |  |  |            
|Number  |      |    |  |  | Description
|        |      |    |  |  |            
|        | *31  | .A |  |  |             | Certification of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|        | *31  | .B |  |  |             | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.    
|        | **32 | .A |  |  |             | Certification of Principal Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.
|        | **32 | .B |  |  |             | Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.