##### 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 1-7176





El Paso CGP Company




|                                                                                                      |  |                                                   
|----------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware(State or Other Jurisdiction
    of Incorporation or Organization)                            |  | 74-1734212(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




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EL PASO CGP 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                                          |  |      | 23 | 
|                                             |  | Cautionary Statements for Purposes of the
    Safe Harbor Provisions of the Private Securities
    Litigation Reform Act of 1995 |  |      | 34 | 
|Item 3.                                      |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                                     |  |      | *  | 
|Item 4.                                      |  | Controls and Procedures                                                                                                            |  |      | 35 | 
|                                             |  | PART II  Other Information                                                                                                        |  |      |    | 
|Item 1.                                      |  | Legal Proceedings                                                                                                                  |  |      | 37 | 
|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                                                                                                                  |  |      | 37 | 
|Item 6.                                      |  | Exhibits                                                                                                                           |  |      | 38 | 
|                                             |  | Signatures                                                                                                                         |  |      | 39 | 
|Certification of CEO pursuant to Section 302
|Certification of CFO pursuant to Section 302
|Certification of CEO 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                                       
|Bbl   |  | = barrels                                       
|BBtu  |  | = billion British thermal units                 
|Bcfe  |  | = billion cubic feet of natural gas equivalents 
|MBbls |  | = thousand barrels                              
|Mcf   |  | = thousand cubic feet                           
|Mcfe  |  | = thousand cubic feet of natural gas equivalents
|MMBtu |  | = million British thermal units                 
|MMcf  |  | = million cubic feet                            
|MMcfe |  | = million cubic feet of natural gas equivalents 
|MW    |  | = megawatt                                      
|NGL   |  | = natural gas liquids                           





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PART I  FINANCIAL INFORMATION





Item 1. Financial Statements


EL PASO CGP COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(In millions)


(Unaudited)


|                                                 |                                          |               |      |                   |               |   |      |      |  |   |            |     |  |   |       |     | 
|------------------------------------------------ | ---------------------------------------- | ------------- | ---- | ----------------- | ------------- | - | ---- | ---- |  | - | ---------- | --- |  | - | ----- | --- | 
|                                                 |                                          |               |      | Nine Months Ended |              
|                                                 |                                          | Quarter Ended |      |                   | September 30, |  
|                                                 |                                          | September 30, |      |                   |               |  
|                                                 |                                          |               |      |                   |               |   | 2004 |     
|                                                 |                                          | 2005          |      |                   | 2004          |   |      | 2005 |  |   | (Restated) |    
|                                                 |                                          |               |      |                   |               |   |      |      |  |   |            |    
|Operating revenues                               |                                          | $             | 403  |                   |               | $ | 472  |      |  | $ | 1,332      |     |  | $ | 1,396 |    
|                                                 |                                          |               |      |                   |               |   |      |      |  |   |            |    
|Operating expenses                               |                                          |               |      |                   |               |   |      |      |  |   |            |     |  |   |       |    
|                                                 | Cost of products and services            |               |      | 69                |               |   |      | 114  |  |   |            | 186 |  |   |       | 240 | 
|                                                 | Operation and maintenance                |               |      | 151               |               |   |      | 141  |  |   |            | 406 |  |   |       | 377 | 
|                                                 | Depreciation, depletion and amortization |               |      | 110               |               |   |      | 115  |  |   |            | 351 |  |   |       | 342 | 
|                                                 | Loss on long-lived assets                |               |      |                  |               |   |      | 6    |  |   |            | 64  |  |   |       | 94  | 
|                                                 | Taxes, other than income taxes           |               |      | 23                |               |   |      | 17   |  |   |            | 56  |  |   |       | 45  | 
|                                                 |                                          |               |      |                   |               |   |      |      |  |   |            |    
|                                                 |                                          |               | 353  |                   |               |   | 393  |      |  |   | 1,063      |     |  |   | 1,098 |    
|                                                 |                                          |               |      |                   |               |   |      |      |  |   |            |    
|Operating income                                 |                                          |               | 50   |                   |               |   | 79   |      |  |   | 269        |     |  |   | 298   |    
|Earnings (losses) from unconsolidated affiliates |                                          |               | (126 | )                 |               |   | 22   |      |  |   | (211       | )   |  |   | 81    |    
|Other income, net                                |                                          |               | 6    |                   |               |   | 16   |      |  |   | 27         |     |  |   | 29    |    
|Interest and debt expense                        |                                          |               | (72  | )                 |               |   | (75  | )    |  |   | (222       | )   |  |   | (267  | )  
|Affiliated interest income (expense), net        |                                          |               | 4    |                   |               |   | 5    |      |  |   | 10         |     |  |   | (4    | )  
|                                                 |                                          |               |      |                   |               |   |      |      |  |   |            |    
|Income (loss) before income taxes                |                                          |               | (138 | )                 |               |   | 47   |      |  |   | (127       | )   |  |   | 137   |    
|Income taxes                                     |                                          |               | (46  | )                 |               |   | 17   |      |  |   | (21        | )   |  |   | 48    |    
|                                                 |                                          |               |      |                   |               |   |      |      |  |   |            |    
|Income (loss) from continuing operations         |                                          |               | (92  | )                 |               |   | 30   |      |  |   | (106       | )   |  |   | 89    |    
|Discontinued operations, net of income taxes     |                                          |               | 11   |                   |               |   | (4   | )    |  |   | 11         |     |  |   | (99   | )  
|                                                 |                                          |               |      |                   |               |   |      |      |  |   |            |    
|Net income (loss)                                |                                          | $             | (81  | )                 |               | $ | 26   |      |  | $ | (95        | )   |  | $ | (10   | )  
|                                                 |                                          |               |      |                   |               |   |      |      |  |   |            |    



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EL PASO CGP COMPANY


CONDENSED CONSOLIDATED BALANCE SHEETS


(In millions, except share amounts)


(Unaudited)


|                                       |                                                           |                                                            |                                          |       |              |       |        |       |     |       | 
|-------------------------------------- | --------------------------------------------------------- | ---------------------------------------------------------- | ---------------------------------------- | ----- | ------------ | ----- | ------ | ----- | --- | ----- | 
|                                       |                                                           | September 30,                                              |                                          |       | December 31, |      
|                                       |                                                           | 2005                                                       |                                          |       | 2004         |      
|                                       |                                                           |                                                            |                                          |       |              |      
|ASSETS                                
|Current assets                         |                                                           |                                                            |                                          |       |              |       |        |      
|                                       | Cash and cash equivalents                                 |                                                            | $                                        | 61    |              |       | $      | 80    |    
|                                       | Accounts and notes receivable                             |                                                            |                                          |       |              |       |        |       |    
|                                       |                                                           | Customers, net of allowance of $15 in 2005 and $27 in 2004 |                                          |       | 199          |       |        |       | 217 |      
|                                       |                                                           | Affiliates                                                 |                                          |       | 280          |       |        |       | 264 |      
|                                       |                                                           | Other                                                      |                                          |       | 65           |       |        |       | 93  |      
|                                       | Inventory                                                 |                                                            |                                          | 41    |              |       |        | 52    |    
|                                       | Assets from discontinued operations                       |                                                            |                                          | 197   |              |       |        | 185   |    
|                                       | Deferred income taxes                                     |                                                            |                                          | 77    |              |       |        | 87    |    
|                                       | Other                                                     |                                                            |                                          | 58    |              |       |        | 40    |    
|                                       |                                                           |                                                            |                                          |       |              |      
|                                       |                                                           |                                                            | Total current assets                     |       |              | 978   |        |       |     | 1,018 | 
|                                       |                                                           |                                                            |                                          |       |              |      
|Property, plant and equipment, at cost |                                                           |                                                            |                                          |       |              |       |        |      
|                                       | Natural gas and oil properties, at full cost              |                                                            |                                          | 7,319 |              |       |        | 7,153 |    
|                                       | Pipelines                                                 |                                                            |                                          | 7,145 |              |       |        | 7,040 |    
|                                       | Power facilities                                          |                                                            |                                          | 178   |              |       |        | 373   |    
|                                       | Gathering and processing systems                          |                                                            |                                          | 37    |              |       |        | 44    |    
|                                       | Other                                                     |                                                            |                                          | 132   |              |       |        | 89    |    
|                                       |                                                           |                                                            |                                          |       |              |      
|                                       |                                                           |                                                            | 14,811                                   |       |              |       | 14,699 |      
|                                       | Less accumulated depreciation, depletion and amortization |                                                            |                                          | 8,130 |              |       |        | 7,981 |    
|                                       |                                                           |                                                            |                                          |       |              |      
|                                       |                                                           |                                                            | Total property, plant and equipment, net |       |              | 6,681 |        |       |     | 6,718 | 
|                                       |                                                           |                                                            |                                          |       |              |      
|Other assets                           |                                                           |                                                            |                                          |       |              |       |        |      
|                                       | Investments in unconsolidated affiliates                  |                                                            |                                          | 638   |              |       |        | 894   |    
|                                       | Goodwill and other intangible assets, net                 |                                                            |                                          | 413   |              |       |        | 419   |    
|                                       | Other                                                     |                                                            |                                          | 532   |              |       |        | 295   |    
|                                       |                                                           |                                                            |                                          |       |              |      
|                                       |                                                           |                                                            | 1,583                                    |       |              |       | 1,608  |      
|                                       |                                                           |                                                            |                                          |       |              |      
|                                       |                                                           |                                                            | Total assets                             |       | $            | 9,242 |        |       | $   | 9,344 | 
|                                       |                                                           |                                                            |                                          |       |              |      



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EL PASO CGP COMPANY


CONDENSED CONSOLIDATED BALANCE SHEETS 
(Continued)


(In millions, except share amounts)


(Unaudited)


|                                                         |                                                                              |               |                                            |       |              |       |       |       |     |       | 
|-------------------------------------------------------- | ---------------------------------------------------------------------------- | ------------- | ------------------------------------------ | ----- | ------------ | ----- | ----- | ----- | --- | ----- | 
|                                                         |                                                                              | September 30, |                                            |       | December 31, |      
|                                                         |                                                                              | 2005          |                                            |       | 2004         |      
|                                                         |                                                                              |               |                                            |       |              |      
|LIABILITIES AND STOCKHOLDERS EQUITY                    
|Current liabilities                                      |                                                                              |               |                                            |       |              |       |       |      
|                                                         | Accounts payable                                                             |               |                                            |       |              |       |       |       |    
|                                                         |                                                                              | Trade         |                                            | $     | 130          |       |       | $     | 153 |      
|                                                         |                                                                              | Affiliates    |                                            |       | 59           |       |       |       | 61  |      
|                                                         |                                                                              | Other         |                                            |       | 179          |       |       |       | 211 |      
|                                                         | Current maturities of long-term debt                                         |               |                                            | 342   |              |       |       | 310   |    
|                                                         | Notes payable to affiliates                                                  |               |                                            | 88    |              |       |       | 211   |    
|                                                         | Liabilities from price risk management activities                            |               |                                            | 137   |              |       |       | 148   |    
|                                                         | Accrued interest                                                             |               |                                            | 61    |              |       |       | 59    |    
|                                                         | Liabilities from discontinued operations                                     |               |                                            | 118   |              |       |       | 104   |    
|                                                         | Other                                                                        |               |                                            | 304   |              |       |       | 211   |    
|                                                         |                                                                              |               |                                            |       |              |      
|                                                         |                                                                              |               | Total current liabilities                  |       |              | 1,418 |       |       |     | 1,468 | 
|                                                         |                                                                              |               |                                            |       |              |      
|Long-term financing obligations, less current maturities |                                                                              |               | 3,583                                      |       |              |       | 3,447 |      
|                                                         |                                                                              |               |                                            |       |              |      
|Other                                                    |                                                                              |               |                                            |       |              |       |       |      
|                                                         | Deferred income taxes                                                        |               |                                            | 635   |              |       |       | 692   |    
|                                                         | Other                                                                        |               |                                            | 314   |              |       |       | 388   |    
|                                                         |                                                                              |               |                                            |       |              |      
|                                                         |                                                                              |               | 949                                        |       |              |       | 1,080 |      
|                                                         |                                                                              |               |                                            |       |              |      
|Commitments and contingencies                            |                                                                              |               |                                            |       |              |       |       |      
|Securities of subsidiaries                               |                                                                              |               | 153                                        |       |              |       | 158   |      
|                                                         |                                                                              |               |                                            |       |              |      
|Stockholders equity                                     |                                                                              |               |                                            |       |              |       |       |      
|                                                         | Common stock, par value $1 per share; authorized and issued
    1,000 shares |               |                                            |      |              |       |       |      |    
|                                                         | Additional paid-in capital                                                   |               |                                            | 3,181 |              |       |       | 3,181 |    
|                                                         | Retained earnings                                                            |               |                                            | 8     |              |       |       | 103   |    
|                                                         | Accumulated other comprehensive loss                                         |               |                                            | (50   | )            |       |       | (93   | )  
|                                                         |                                                                              |               |                                            |       |              |      
|                                                         |                                                                              |               | Total stockholders equity                 |       |              | 3,139 |       |       |     | 3,191 | 
|                                                         |                                                                              |               |                                            |       |              |      
|                                                         |                                                                              |               | Total liabilities and stockholders equity |       | $            | 9,242 |       |       | $   | 9,344 | 
|                                                         |                                                                              |               |                                            |       |              |      



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EL PASO CGP COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(In millions)


(Unaudited)


|                                     |                                                                                      |                                                                                       |                                                     |      |               |      |    |      |        |        |  
|------------------------------------ | ------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------- | --------------------------------------------------- | ---- | ------------- | ---- | -- | ---- | ------ | ------ | -
|                                     |                                                                                      | Nine Months Ended                                                                     |                                                    
|                                     |                                                                                      | September 30,                                                                         |                                                    
|                                     |                                                                                      |                                                                                       |                                                    
|                                     |                                                                                      |                                                                                       |                                                     | 2004 |              
|                                     |                                                                                      | 2005                                                                                  |                                                     |      | (Restated)(1) |     
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|Cash flows from operating activities |                                                                                      |                                                                                       |                                                     |      |               |      |    |     
|                                     | Net loss                                                                             |                                                                                       | $                                                   | (95  | )             |      | $  | (10  | )     
|                                     |                                                                                      | Income (loss) from discontinued operations, net of income taxes                       |                                                     |      | 11            |      |    |      | (99    | )     
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|                                     | Net income (loss) from continuing operations                                         |                                                                                       |                                                     | (106 | )             |      |    | 89   |       
|                                     | Adjustments to reconcile net income (loss) to net cash from
    operating activities |                                                                                       |                                                     |      |               |      |    |      |       
|                                     |                                                                                      | Depreciation, depletion and amortization                                              |                                                     |      | 351           |      |    |      | 342    |       
|                                     |                                                                                      | Loss on long-lived assets                                                             |                                                     |      | 64            |      |    |      | 94     |       
|                                     |                                                                                      | Losses (earnings) from unconsolidated affiliates, adjusted for
    cash distributions |                                                     |      | 301           |      |    |      | (6     | )     
|                                     |                                                                                      | Deferred income taxes                                                                 |                                                     |      | (46           | )    |    |      | 37     |       
|                                     |                                                                                      | Other non-cash items                                                                  |                                                     |      | (10           | )    |    |      | 15     |       
|                                     |                                                                                      | Asset and liability changes                                                           |                                                     |      | (4            | )    |    |      | 138    |       
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|                                     |                                                                                      | Cash provided by continuing operations                                                |                                                     |      | 550           |      |    |      | 709    |       
|                                     |                                                                                      | Cash provided by (used in) discontinued operations                                    |                                                     |      | (6            | )    |    |      | 189    |       
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|                                     |                                                                                      |                                                                                       | Net cash provided by operating activities           |      |               | 544  |    |      |        | 898    |  
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|Cash flows from investing activities |                                                                                      |                                                                                       |                                                     |      |               |      |    |     
|                                     | Additions to property, plant and equipment                                           |                                                                                       |                                                     | (437 | )             |      |    | (559 | )     
|                                     | Purchases of interests in equity investments                                         |                                                                                       |                                                     | (7   | )             |      |    | (12  | )     
|                                     | Net proceeds from the sale of assets and investments                                 |                                                                                       |                                                     | 19   |               |      |    | 96   |       
|                                     | Net change in restricted cash                                                        |                                                                                       |                                                     | (4   | )             |      |    | 33   |       
|                                     | Net change in notes receivable from affiliates                                       |                                                                                       |                                                     | (299 | )             |      |    |     |       
|                                     | Net change in notes from unconsolidated affiliates                                   |                                                                                       |                                                     | 12   |               |      |    | (48  | )     
|                                     | Other                                                                                |                                                                                       |                                                     | 54   |               |      |    | 35   |       
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|                                     |                                                                                      | Cash used in continuing operations                                                    |                                                     |      | (662          | )    |    |      | (455   | )     
|                                     |                                                                                      | Cash provided by discontinued operations                                              |                                                     |      | 68            |      |    |      | 1,138  |       
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|                                     |                                                                                      |                                                                                       | Net cash provided by (used in) investing activities |      |               | (594 | )  |      |        | 683    |  
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|Cash flows from financing activities |                                                                                      |                                                                                       |                                                     |      |               |      |    |     
|                                     | Payments to retire long-term debt and other financing obligations                    |                                                                                       |                                                     | (298 | )             |      |    | (465 | )     
|                                     | Net change in affiliated notes payable                                               |                                                                                       |                                                     | (123 | )             |      |    | (801 | )     
|                                     | Net proceeds from the issuance of long-term debt and other
    financing obligations |                                                                                       |                                                     | 458  |               |      |    |     |       
|                                     | Proceeds from issuance of securities of subsidiaries                                 |                                                                                       |                                                     |     |               |      |    | 75   |       
|                                     | Contributions from discontinued operations                                           |                                                                                       |                                                     | 62   |               |      |    | 962  |       
|                                     | Other                                                                                |                                                                                       |                                                     | (6   | )             |      |    | (1   | )     
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|                                     |                                                                                      | Cash provided by (used in) continuing operations                                      |                                                     |      | 93            |      |    |      | (230   | )     
|                                     |                                                                                      | Cash used in discontinued operations                                                  |                                                     |      | (62           | )    |    |      | (1,327 | )     
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|                                     |                                                                                      |                                                                                       | Net cash provided by (used in) financing activities |      |               | 31   |    |      |        | (1,557 | )
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|Change in cash and cash equivalents  |                                                                                      |                                                                                       | (19                                                 | )    |               |      | 24 |     
|Cash and cash equivalents            |                                                                                      |                                                                                       |                                                     |      |               |      |    |     
|                                     | Beginning of period                                                                  |                                                                                       |                                                     | 80   |               |      |    | 150  |       
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     
|                                     | End of period                                                                        |                                                                                       | $                                                   | 61   |               |      | $  | 174  |       
|                                     |                                                                                      |                                                                                       |                                                     |      |               |     






|    |                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Only individual line items within cash flows from operating
    activities have been restated. Total cash flows from operating
    activities, investing activities, and financing activities, as
    well as discontinued operations were unaffected by our
    restatements.



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##### Table of Contents



EL PASO CGP COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(In millions)


(Unaudited)


|                                                                                                                            |                                                                                                                                                             |                                   |     |                   |               |   |      |      |    |   |            |     |    |   |     |     |     |  
|--------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | --- | ----------------- | ------------- | - | ---- | ---- | -- | - | ---------- | --- | -- | - | --- | --- | --- | -
|                                                                                                                            |                                                                                                                                                             |                                   |     | Nine Months Ended |              
|                                                                                                                            |                                                                                                                                                             | Quarter Ended                     |     |                   | September 30, |  
|                                                                                                                            |                                                                                                                                                             | September 30,                     |     |                   |               |  
|                                                                                                                            |                                                                                                                                                             |                                   |     |                   |               |   | 2004 |     
|                                                                                                                            |                                                                                                                                                             | 2005                              |     |                   | 2004          |   |      | 2005 |    |   | (Restated) |    
|                                                                                                                            |                                                                                                                                                             |                                   |     |                   |               |   |      |      |    |   |            |    
|Net income (loss)                                                                                                           |                                                                                                                                                             | $                                 | (81 | )                 |               | $ | 26   |      |    | $ | (95        | )   |    | $ | (10 | )  
|                                                                                                                            |                                                                                                                                                             |                                   |     |                   |               |   |      |      |    |   |            |    
|Foreign currency translation adjustments (net of income taxes of
    less than $1 in 2005 and less than $1 and $36 in 2004) |                                                                                                                                                             |                                   | 1   |                   |               |   | (1   | )    |    |   | 7          |     |    |   | (34 | )  
|Unrealized net gains (losses) from cash flow hedging activity                                                               |                                                                                                                                                             |                                   |     |                   |               |   |      |      |    |   |            |     |    |   |     |    
|                                                                                                                            | Unrealized mark-to-market losses arising during period (net of
    income taxes of $16 and $19 in 2005 and $8 and $23 in
    2004)                          |                                   |     | (38               | )             |   |      | (12  | )  |   |            | (42 | )  |   |     | (38 | )  
|                                                                                                                            | Reclassification adjustments for changes in initial value to the
    settlement date (net of income taxes of $19 and $43 in 2005 and
    $2 and $8 in 2004) |                                   |     | 36                |               |   |      | 4    |    |   |            | 78  |    |   |     | 13  |    
|                                                                                                                            |                                                                                                                                                             |                                   |     |                   |               |   |      |      |    |   |            |    
|                                                                                                                            |                                                                                                                                                             | Other comprehensive income (loss) |     |                   | (1            | ) |      |      | (9 | ) |            |     | 43 |   |     |     | (59 | )
|                                                                                                                            |                                                                                                                                                             |                                   |     |                   |               |   |      |      |    |   |            |    
|Comprehensive income (loss)                                                                                                 |                                                                                                                                                             | $                                 | (82 | )                 |               | $ | 17   |      |    | $ | (52        | )   |    | $ | (69 | )  
|                                                                                                                            |                                                                                                                                                             |                                   |     |                   |               |   |      |      |    |   |            |    



5



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##### Table of Contents



EL PASO CGP COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


1. Basis of Presentation and Significant Accounting
Policies


Basis of Presentation




Restatement


Cumulative Foreign Currency Translation Adjustments
(CTA).








|                                |                                              |                           |   |      |             |  |   |     |  
|------------------------------- | -------------------------------------------- | ------------------------- | - | ---- | ----------- |  | - | --- | -
|                                |                                              | For the Nine Months Ended |  
|                                |                                              | September 30, 2004        |  
|                                |                                              |                           |  
|                                |                                              | As Reported               |   |      | As Restated | 
|                                |                                              |                           |   |      |             | 
|                                |                                              | (In millions)             |  
|Income statement                |                                              |                           |   |      |             |  |   |    
|                                | Discontinued operations, net of income taxes |                           | $ | (131 | )           |  | $ | (99 | )
|                                | Net loss                                     |                           |   | (42  | )           |  |   | (10 | )
|Statement of comprehensive loss |                                              |                           |   |      |             |  |   |    
|                                | Foreign currency translation adjustments     |                           | $ | (2   | )           |  | $ | (34 | )
|                                | Other comprehensive loss                     |                           |   | (27  | )           |  |   | (59 | )

6



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##### Table of Contents



New Accounting Pronouncements
Issued But Not Yet Adopted




Accounting for Deferred Taxes on Foreign Earnings. Accounting and Disclosure Guidance for the Foreign Earnings
Repatriation Provision within the American Jobs Creation Act of
2004.


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


Accounting for Pipeline Integrity Costs.


2. Divestitures




| |                                
| | -------------------------------
| | Sales of Assets and Investments



|                 |                |               |     |     |      |   |       |     | 
|---------------- | -------------- | ------------- | --- | --- | ---- | - | ----- | --- | 
|                 |                | 2005          |     |     | 2004 |  
|                 |                |               |     |     |      |  
|                 |                | (In millions) |    
|Regulated        |                |               |     |     |      |   |       |    
|                 | Pipelines      |               | $   | 14  |      |   | $     |    | 
|Non-regulated    |                |               |     |     |      |   |       |    
|                 | Production     |               |     |    |      |   |       | 24  | 
|                 | Power          |               |     | 10  |      |   |       | 92  | 
|                 | Field Services |               |     |    |      |   |       | 3   | 
|                 |                |               |     |     |      |  
|Total continuing |                |               | 24  | (1) |      |   | 119   | (1)
|Discontinued     |                |               | 87  |     |      |   | 1,289 |    
|                 |                |               |     |     |      |  
|Total            |                | $             | 111 |     |      | $ | 1,408 |    
|                 |                |               |     |     |      |  






|    |                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Proceeds exclude returns of invested capital and cash
    transferred with the assets sold and include costs incurred in
    preparing assets for disposal. These items decreased our sales
    proceeds by $5 million and $23 million for the nine
    months ended September 30, 2005 and 2004. Proceeds also
    exclude any non-cash consideration received in these sales.

7



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##### Table of Contents





|               |  |                                                                                                                                    |  |                                                                                                                                                                               |  | 
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|               |  | 2005                                                                                                                               |  | 2004                                                                                                                                                                          |  | 
|               |  |                                                                                                                                    |  |                                                                                                                                                                               |  | 
|Pipelines      |  |  Interest in a gathering system in western United
    States                                                                      |  |  None                                                                                                                                                                        |  | 
|Production     |  |  None                                                                                                                             |  |  Brazilian exploration and production assets                                                                                                                                 |  | 
|Power          |  |  Eagle Point power facility                                                                                                       |  |  Mohawk River Funding IV                                                                                                                                                     |  | 
|               |  |  Rensselaer power facility                                                                                                        |  |  Utility Contract Funding (UCF)                                                                                                                                              |  | 
|               |  |  Power turbine                                                                                                                    |  |  Bastrop Company equity investment                                                                                                                                           |  | 
|Field Services |  |  None                                                                                                                             |  |  Dauphin Island and Mobile Bay equity investments                                                                                                                            |  | 
|Discontinued   |  |  Interest in Paraxylene facility
     MTBE processing facility
     International natural gas and oil production
    properties |  |  Natural gas and oil production
    properties in Canada and other international production
    assets
     Aruba and Eagle Point refineries and other petroleum
    assets |  | 



Accounting for the Impairment or
Disposal of Long-Lived Assets




| |                        
| | -----------------------
| | Discontinued Operations

South Louisiana Gathering and Processing Operations.


International Natural Gas and Oil Production Operations.


Petroleum Markets.


8



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##### Table of Contents





|                                                                |  |               |      |               |            |       |           |            |  |   |       |   |  |   |      |  
|--------------------------------------------------------------- |  | ------------- | ---- | ------------- | ---------- | ----- | --------- | ---------- |  | - | ----- | - |  | - | ---- | -
|                                                                |  |               |      |               |            | South |           |            | 
|                                                                |  |               |      | International |            |       | Louisiana |            |  |  
|                                                                |  |               |      | Natural Gas   |            |       | Gathering |            |  |  
|                                                                |  |               |      | and Oil       |            |       | and       |            |  |  
|                                                                |  | Petroleum     |      |               | Production |       |           | Processing |  |   |      
|                                                                |  | Markets       |      |               | Operations |       |           | Operations |  |   | Total |  
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  
|                                                                |  | (In millions) |     
|Operating Results Data                                          |  |               |      |               |            |       |           |           
|Quarter Ended September 30, 2005                                |  |               |      |               |            |       |           |            |  |   |       |   |  |   |      |  
|Revenues                                                        |  | $             | 26   |               |            | $     |          |            |  | $ | 99    |   |  | $ | 125  |  
|Costs and expenses                                              |  |               | (30  | )             |            |       |          |            |  |   | (89   | ) |  |   | (119 | )
|Gain on long-lived assets                                       |  |               | 1    |               |            |       |          |            |  |   |      |   |  |   | 1    |  
|Other income                                                    |  |               | 1    |               |            |       |          |            |  |   |      |   |  |   | 1    |  
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  
|Income (loss) before income taxes                               |  |               | (2   | )             |            |       |          |            |  |   | 10    |   |  |   | 8    |  
|Income taxes                                                    |  |               | (7   | )             |            |       |          |            |  |   | 4     |   |  |   | (3   | )
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  
|Income from discontinued operations, net of income taxes        |  | $             | 5    |               |            | $     |          |            |  | $ | 6     |   |  | $ | 11   |  
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  
|Quarter Ended September 30, 2004                                |  |               |      |               |            |       |           |            |  |   |       |   |  |   |      |  
|Revenues                                                        |  | $             | 44   |               |            | $     | 1         |            |  | $ | 59    |   |  | $ | 104  |  
|Costs and expenses                                              |  |               | (52  | )             |            |       | (4        | )          |  |   | (47   | ) |  |   | (103 | )
|Gain (loss) on long-lived assets                                |  |               | 1    |               |            |       | (5        | )          |  |   |      |   |  |   | (4   | )
|Other income                                                    |  |               | 13   |               |            |       |          |            |  |   |      |   |  |   | 13   |  
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  
|Income (loss) before income taxes                               |  |               | 6    |               |            |       | (8        | )          |  |   | 12    |   |  |   | 10   |  
|Income taxes                                                    |  |               | 10   |               |            |       |          |            |  |   | 4     |   |  |   | 14   |  
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  
|Income (loss) from discontinued operations, net of income taxes |  | $             | (4   | )             |            | $     | (8        | )          |  | $ | 8     |   |  | $ | (4   | )
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  
|Nine Months Ended September 30, 2005                            |  |               |      |               |            |       |           |            |  |   |       |   |  |   |      |  
|Revenues                                                        |  | $             | 100  |               |            | $     | 2         |            |  | $ | 276   |   |  | $ | 378  |  
|Costs and expenses                                              |  |               | (116 | )             |            |       | (2        | )          |  |   | (243  | ) |  |   | (361 | )
|Gain (loss) on long-lived assets                                |  |               | 4    |               |            |       | (5        | )          |  |   |      |   |  |   | (1   | )
|Other income (expense)                                          |  |               | 12   |               |            |       |          |            |  |   | (1    | ) |  |   | 11   |  
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  
|Income (loss) before income taxes                               |  |               |     |               |            |       | (5        | )          |  |   | 32    |   |  |   | 27   |  
|Income taxes                                                    |  |               | 6    |               |            |       | (3        | )          |  |   | 13    |   |  |   | 16   |  
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  
|Income (loss) from discontinued operations, net of income taxes |  | $             | (6   | )             |            | $     | (2        | )          |  | $ | 19    |   |  | $ | 11   |  
|                                                                |  |               |      |               |            |       |           |            |  |   |       |  

9



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##### Table of Contents



|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |    |     |   |        |     |     | 
|--------------------------------------------------------------- | ---------------------------------- | ----------------- | ---- | ------------- | ---------- | ----- | --------- | ---------- | - | - | ----- | -- | --- | - | ------ | --- | --- | 
|                                                                |                                    |                   |      |               |            | South |           |            |  
|                                                                |                                    |                   |      | International |            |       | Louisiana |            |   |  
|                                                                |                                    |                   |      | Natural Gas   |            |       | Gathering |            |   |  
|                                                                |                                    |                   |      | and Oil       |            |       | and       |            |   |  
|                                                                |                                    | Petroleum         |      |               | Production |       |           | Processing |   |   |      
|                                                                |                                    | Markets           |      |               | Operations |       |           | Operations |   |   | Total |   
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|                                                                |                                    | (In millions)     |     
|Nine Months Ended September 30, 2004                            |                                    |                   |      |               |            |       |           |            |   |   |       |    |     |   |        |    
|Revenues                                                        |                                    | $                 | 737  |               |            | $     | 29        |            |   | $ | 198   |    |     | $ | 964    |    
|Costs and expenses                                              |                                    |                   | (782 | )             |            |       | (51       | )          |   |   | (168  | )  |     |   | (1,001 | )  
|Loss on long-lived assets                                       |                                    |                   | (37  | )             |            |       | (21       | )          |   |   |      |    |     |   | (58    | )  
|Other income                                                    |                                    |                   | 4    |               |            |       |          |            |   |   |      |    |     |   | 4      |    
|Interest and debt expense                                       |                                    |                   | (3   | )             |            |       | 1         |            |   |   |      |    |     |   | (2     | )  
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|Income (loss) before income taxes                               |                                    |                   | (81  | )             |            |       | (42       | )          |   |   | 30    |    |     |   | (93    | )  
|Income taxes                                                    |                                    |                   | 1    |               |            |       | (5        | )          |   |   | 10    |    |     |   | 6      |    
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|Income (loss) from discontinued operations, net of income taxes |                                    | $                 | (82  | )             |            | $     | (37       | )          |   | $ | 20    |    |     | $ | (99    | )  
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|Financial Position Data                                         |                                    |                   |      |               |            |       |           |            |   |   |       |    |     |   |        |    
|September 30, 2005                                              |                                    |                   |      |               |            |       |           |            |   |   |       |    |     |   |        |    
|Assets of discontinued operations                               |                                    |                   |      |               |            |       |           |            |   |   |       |    |     |   |        |    
|                                                                | Accounts and notes receivables     |                   | $    | 3             |            |       | $         |           |   |   | $     | 67 |     |   | $      | 70  |    
|                                                                | Inventory                          |                   |      | 3             |            |       |           |           |   |   |       | 3  |     |   |        | 6   |    
|                                                                | Other current assets               |                   |      |              |            |       |           |           |   |   |       | 21 |     |   |        | 21  |    
|                                                                | Property, plant and equipment, net |                   |      |              |            |       |           |           |   |   |       | 92 |     |   |        | 92  |    
|                                                                | Other non-current assets           |                   |      |              |            |       |           |           |   |   |       | 8  |     |   |        | 8   |    
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|                                                                |                                    | Total assets      |      | $             | 6          |       |           | $          |  |   |       | $  | 191 |   |        | $   | 197 | 
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|Liabilities of discontinued operations                          |                                    |                   |      |               |            |       |           |            |   |   |       |    |     |   |        |    
|                                                                | Accounts payable                   |                   | $    |              |            |       | $         |           |   |   | $     | 77 |     |   | $      | 77  |    
|                                                                | Other current liabilities          |                   |      |              |            |       |           |           |   |   |       | 13 |     |   |        | 13  |    
|                                                                | Other non-current liabilities      |                   |      |              |            |       |           |           |   |   |       | 28 |     |   |        | 28  |    
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|                                                                |                                    | Total liabilities |      | $             |           |       |           | $          |  |   |       | $  | 118 |   |        | $   | 118 | 
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|December 31, 2004                                               |                                    |                   |      |               |            |       |           |            |   |   |       |    |     |   |        |    
|Assets of discontinued operations                               |                                    |                   |      |               |            |       |           |            |   |   |       |    |     |   |        |    
|                                                                | Accounts and notes receivables     |                   | $    | 39            |            |       | $         | 2          |   |   | $     | 64 |     |   | $      | 105 |    
|                                                                | Inventory                          |                   |      | 8             |            |       |           |           |   |   |       | 6  |     |   |        | 14  |    
|                                                                | Other current assets               |                   |      | 3             |            |       |           | 1          |   |   |       | 9  |     |   |        | 13  |    
|                                                                | Property, plant and equipment, net |                   |      | 14            |            |       |           | 6          |   |   |       | 81 |     |   |        | 101 |    
|                                                                | Other non-current assets           |                   |      | 33            |            |       |           |           |   |   |       | 8  |     |   |        | 41  |    
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|                                                                |                                    | Total assets      |      | $             | 97         |       |           | $          | 9 |   |       | $  | 168 |   |        | $   | 274 | 
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|Liabilities of discontinued operations                          |                                    |                   |      |               |            |       |           |            |   |   |       |    |     |   |        |    
|                                                                | Accounts payable                   |                   | $    | 5             |            |       | $         |           |   |   | $     | 84 |     |   | $      | 89  |    
|                                                                | Other current liabilities          |                   |      | 3             |            |       |           |           |   |   |       | 9  |     |   |        | 12  |    
|                                                                | Other non-current liabilities      |                   |      | 3             |            |       |           |           |   |   |       | 31 |     |   |        | 34  |    
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   
|                                                                |                                    | Total liabilities |      | $             | 11         |       |           | $          |  |   |       | $  | 124 |   |        | $   | 135 | 
|                                                                |                                    |                   |      |               |            |       |           |            |   |   |       |   

10



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##### Table of Contents



3. Loss on Long-Lived Assets




|                                                                                               |  |               |     |  |                   |   |    |      |  |   |      |   |  |   |    |  
|---------------------------------------------------------------------------------------------- |  | ------------- | --- |  | ----------------- | - | -- | ---- |  | - | ---- | - |  | - | -- | -
|                                                                                               |  | Quarter Ended |     |  | Nine Months Ended |  
|                                                                                               |  | September 30, |     |  | September 30,     |  
|                                                                                               |  |               |     |  |                   |  
|                                                                                               |  | 2005          |     |  | 2004              |   |    | 2005 |  |   | 2004 |  
|                                                                                               |  |               |     |  |                   |   |    |      |  |   |      |  
|                                                                                               |  | (In millions) |    
|Net realized gain                                                                              |  | $             |    |  |                   | $ | (2 | )    |  | $ | (2   | ) |  | $ | (5 | )
|Asset impairments                                                                              |  |               |    |  |                   |   | 8  |      |  |   | 66   |   |  |   | 99 |  
|                                                                                               |  |               |     |  |                   |   |    |      |  |   |      |  
|Loss on long-lived assets                                                                      |  |               |    |  |                   |   | 6  |      |  |   | 64   |   |  |   | 94 |  
|(Gain) loss on sale of investments in unconsolidated affiliates,
    net of
    impairments(1) |  |               | 148 |  |                   |   | (2 | )    |  |   | 283  |   |  |   | (5 | )
|                                                                                               |  |               |     |  |                   |   |    |      |  |   |      |  
|Loss on long-lived assets and investments                                                      |  | $             | 148 |  |                   | $ | 4  |      |  | $ | 347  |   |  | $ | 89 |  
|                                                                                               |  |               |     |  |                   |   |    |      |  |   |      |  






|    |                                                                                  
|--- | ---------------------------------------------------------------------------------
|(1) | See Note 10 for a further description of these gains,
    losses and impairments.





4. Income Taxes




|                   |  |                             |     |             |               |   |    |      |  |   |      |   |  |   |    |  
|------------------ |  | --------------------------- | --- | ----------- | ------------- | - | -- | ---- |  | - | ---- | - |  | - | -- | -
|                   |  |                             |     | Nine Months |              
|                   |  | Quarter Ended               |     |             | Ended         |  
|                   |  | September 30,               |     |             | September 30, |  
|                   |  |                             |     |             |               |  
|                   |  | 2005                        |     |             | 2004          |   |    | 2005 |  |   | 2004 |  
|                   |  |                             |     |             |               |   |    |      |  |   |      |  
|                   |  | (In millions, except rates) |    
|Income taxes       |  | $                           | (46 | )           |               | $ | 17 |      |  | $ | (21  | ) |  | $ | 48 |  
|Effective tax rate |  |                             | 33  | %           |               |   | 36 | %    |  |   | 17   | % |  |   | 35 | %







11



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##### Table of Contents



5. Inventory




|                                 |                 |               |    |    |              |   |    |    | 
|-------------------------------- | --------------- | ------------- | -- | -- | ------------ | - | -- | -- | 
|                                 |                 | September 30, |    |    | December 31, |  
|                                 |                 | 2005          |    |    | 2004         |  
|                                 |                 |               |    |    |              |  
|                                 |                 | (In millions) |   
|Materials and supplies and other |                 | $             | 40 |    |              | $ | 40 |   
|Natural gas liquids              |                 |               | 1  |    |              |   | 12 |   
|                                 |                 |               |    |    |              |  
|                                 | Total inventory |               | $  | 41 |              |   | $  | 52 | 
|                                 |                 |               |    |    |              |  

6. Debt, Other Financing Obligations and Other Credit
Facilities




|                                     |  |               |       |  |              |   |       | 
|------------------------------------ |  | ------------- | ----- |  | ------------ | - | ----- | 
|                                     |  | September 30, |       |  | December 31, |  
|                                     |  | 2005          |       |  | 2004         |  
|                                     |  |               |       |  |              |  
|                                     |  | (In millions) |      
|Current maturities of long-term debt |  | $             | 342   |  |              | $ | 310   | 
|Long-term financing obligations      |  |               | 3,583 |  |              |   | 3,447 | 
|                                     |  |               |       |  |              |  
|Total                                |  | $             | 3,925 |  |              | $ | 3,757 | 
|                                     |  |               |       |  |              |  



| |                                
| | -------------------------------
| | Long-Term Financing Obligations



|                                               |                                             |      |                                 |               |  |                |            |                |   |      |  |  |   |     | 
|---------------------------------------------- | ------------------------------------------- | ---- | ------------------------------- | ------------- |  | -------------- | ---------- | -------------- | - | ---- |  |  | - | --- | 
|                                               |                                             |      |                                 |               |  |                |            | Cash Received/ |  
|Company                                        |                                             | Type |                                 | Interest Rate |  |                | Book Value |                |   | Paid | 
|                                               |                                             |      |                                 |               |  |                |            |                |   |      | 
|                                               |                                             |      |                                 |               |  | (In millions)  |           
|Issuances and other increases                  |                                             |      |                                 |               |  |                |            |                |   |      |  |  |   |    
|                                               | Colorado Interstate Gas
    Company (CIG)   |      | Senior notes due 2015           |               |  | 5.95%          |            |                | $ | 200  |  |  | $ | 197 | 
|                                               | Cheyenne Plains Gas Pipeline
    Company(1) |      | Non-recourse term loan due 2015 |               |  | Variable       |            |                |   | 266  |  |  |   | 261 | 
|                                               |                                             |      |                                 |               |  |                |            |                |   |      | 
|Increases
    through September 30, 2005       |                                             |      | 466                             |               |  |                | 458        |               
|                                               | CIG                                         |      | Senior notes due 2015           |               |  | 6.80%          |            |                |   | 400  |  |  |   | 395 | 
|                                               |                                             |      |                                 |               |  |                |            |                |   |      | 
|Increases
    through the filing date          |                                             | $    | 866                             |               |  | $              | 853        |               
|                                               |                                             |      |                                 |               |  |               
|Repayments, repurchases, retirements and other |                                             |      |                                 |               |  |                |            |                |   |      |  |  |   |    
|                                               | CIG                                         |      | Debentures                      |               |  | 10%            |            |                | $ | 180  |  |  | $ | 180 | 
|                                               | ANR Pipeline Company (ANR)
    (2)          |      | Debentures                      |               |  | 7%             |            |                |   | 68   |  |  |   | 68  | 
|                                               | Other                                       |      | Long-term debt                  |               |  | Various        |            |                |   | 50   |  |  |   | 50  | 
|                                               |                                             |      |                                 |               |  |                |            |                |   |      | 
|Decreases
    through September 30, 2005       |                                             |      | 298                             |               |  |                | 298        |               
|                                               | Wyoming Interstate Company, Ltd. (WIC)      |      | Project Finance                 |               |  | Libor + 1.125% |            |                |   | 21   |  |  |   | 21  | 
|                                               | Other                                       |      | Long-term debt                  |               |  | Various        |            |                |   | 1    |  |  |   | 1   | 
|                                               |                                             |      |                                 |               |  |                |            |                |   |      | 
|Decreases
    through the filing date          |                                             | $    | 320                             |               |  | $              | 320        |               
|                                               |                                             |      |                                 |               |  |               






|    |                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In addition to the borrowing, we have an associated letter of
    credit facility for $12 million, under which we issued
    $6 million of letters of credit in May 2005. We also
    concurrently entered into swaps to convert the variable interest
    rate on approximately $213 million of this debt to a
    current fixed rate of 5.94%.
|   
|(2) | Holders of the $75 million, 7% debentures due 2025 redeemed
    approximately $68 million in June 2005.                                                                                                                                                                                                                                         



| |                  
| | -----------------
| | Credit Facilities



12



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##### Table of Contents









7. Commitments and Contingencies




| |                  
| | -----------------
| | Legal Proceedings

Grynberg. In re: Natural Gas Royalties Qui Tam Litigation, Qui Tam


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


MTBE.


13



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Reserves. GlickenHaus &
Co. et. al. v. El Paso Corporation, El Paso CGP
Company, et. al. Oscar S.
Wyatt et. al. v. El Paso Corporation et. al.


Government Investigations


Reserve Revisions.


Iraq Oil Sales.






14



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##### Table of Contents



Environmental Matters






|              |       |               |    |     |      |   |     |     | 
|------------- | ----- | ------------- | -- | --- | ---- | - | --- | --- | 
|              |       | September 30, |   
|              |       | 2005          |   
|              |       |               |   
|Sites         |       | Expected      |    |     | High |  
|              |       |               |    |     |      |  
|              |       | (In millions) |   
|Operating     |       | $             | 39 |     |      | $ | 45  |    
|Non-operating |       |               | 80 |     |      |   | 143 |    
|Superfund     |       |               | 3  |     |      |   | 8   |    
|              |       |               |    |     |      |  
|              | Total |               | $  | 122 |      |   | $   | 196 | 
|              |       |               |    |     |      |  



|                                                 |  |   |     |  
|------------------------------------------------ |  | - | --- | -
|Balance as of January 1, 2005                    |  | $ | 128 |  
|Additions/adjustments for remediation activities |  |   | 18  |  
|Payments for remediation activities              |  |   | (26 | )
|Other changes, net                               |  |   | 2   |  
|                                                 |  |   |    
|Balance as of September 30, 2005                 |  | $ | 122 |  
|                                                 |  |   |    



CERCLA Matters.


15



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Guarantees




8. Retirement Benefits




|                               |                  |                             |    |             |                     |   |    |          |       |   |                |   |  |      |    |   |      |   |    |      |  |   |      |   |  |   |    |   |  |   |    |   | 
|------------------------------ | ---------------- | --------------------------- | -- | ----------- | ------------------- | - | -- | -------- | ----- | - | -------------- | - |  | ---- | -- | - | ---- | - | -- | ---- |  | - | ---- | - |  | - | -- | - |  | - | -- | - | 
|                               |                  |                             |    | Nine Months |                    
|                               |                  | Quarter Ended September 30, |    |             | Ended September 30, |  
|                               |                  |                             |    |             |                     |  
|                               |                  |                             |    | Other       |                     |   |    |          | Other |  
|                               |                  | Pension                     |    |             | Postretirement      |   |    | Pension  |       |   | Postretirement |  
|                               |                  | Benefits                    |    |             | Benefits            |   |    | Benefits |       |   | Benefits       |  
|                               |                  |                             |    |             |                     |   |    |          |       |   |                |  
|                               |                  | 2005                        |    |             | 2004                |   |    | 2005     |       |   | 2004           |   |  | 2005 |    |   | 2004 |   |    | 2005 |  |   | 2004 |  
|                               |                  |                             |    |             |                     |   |    |          |       |   |                |   |  |      |    |   |      |   |    |      |  |   |      |  
|                               |                  | (In millions)               |   
|Interest cost                  |                  | $                           | 2  |             |                     | $ | 2  |          |       | $ | 1              |   |  | $    | 2  |   |      | $ | 4  |      |  | $ | 4    |   |  | $ | 3  |   |  | $ | 4  |  
|Expected return on plan assets |                  |                             | (2 | )           |                     |   | (2 | )        |       |   | (1             | ) |  |      | (1 | ) |      |   | (3 | )    |  |   | (4   | ) |  |   | (3 | ) |  |   | (2 | )
|                               |                  |                             |    |             |                     |   |    |          |       |   |                |   |  |      |    |   |      |   |    |      |  |   |      |  
|                               | Net benefit cost |                             | $  |            |                     |   | $  |         |       |   | $              |  |  |      | $  | 1 |      |   | $  | 1    |  |   | $    |  |  |   | $  |  |  |   | $  | 2 | 
|                               |                  |                             |    |             |                     |   |    |          |       |   |                |   |  |      |    |   |      |   |    |      |  |   |      |  

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




9. Business Segment Information






16



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|                                          |                                   |               |     |     |                   |   |     |      |  |   |      |      |   |   |      |    | 
|----------------------------------------- | --------------------------------- | ------------- | --- | --- | ----------------- | - | --- | ---- |  | - | ---- | ---- | - | - | ---- | -- | 
|                                          |                                   | Quarter Ended |     |     | Nine Months Ended |  
|                                          |                                   | September 30, |     |     | September 30,     |  
|                                          |                                   |               |     |     |                   |  
|                                          |                                   | 2005          |     |     | 2004              |   |     | 2005 |  |   | 2004 |     
|                                          |                                   |               |     |     |                   |   |     |      |  |   |      |     
|                                          |                                   | (In millions) |    
|Total EBIT                                |                                   | $             | (70 | )   |                   | $ | 117 |      |  | $ | 85   |      |   | $ | 408  |   
|Interest and debt expense                 |                                   |               | (72 | )   |                   |   | (75 | )    |  |   | (222 | )    |   |   | (267 | ) 
|Affiliated interest income (expense), net |                                   |               | 4   |     |                   |   | 5   |      |  |   | 10   |      |   |   | (4   | ) 
|Income taxes                              |                                   |               | 46  |     |                   |   | (17 | )    |  |   | 21   |      |   |   | (48  | ) 
|                                          |                                   |               |     |     |                   |   |     |      |  |   |      |     
|                                          | Income from continuing operations |               | $   | (92 | )                 |   | $   | 30   |  |   | $    | (106 | ) |   | $    | 89 | 
|                                          |                                   |               |     |     |                   |   |     |      |  |   |      |     



|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |    |  |       |   |     |   |  |   |      |    
|------------------------------------------------ |  | ------------- | --- | - | ------------- | ----- | --- | ----- |  | - | -------- | - |  | ------------ | -- |  | ----- | - | --- | - |  | - | ---- | ---
|                                                 |  | Regulated     |     |   | Non-Regulated |       |     |       |  |  
|                                                 |  |               |     |   |               |       |     |       |  |  
|                                                 |  |               |     |   |               | Field |     |       |  |   |         
|Quarter Ended September 30,                      |  | Pipelines     |     |   | Production    |       |     | Power |  |   | Services |   |  | Corporate(1) |    |  | Total |  
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |    |  |       |  
|                                                 |  | (In millions) |     |   |              
|2005                                             |  |               |     |   |               |       |     |       |  |   |          |   |  |              |    |  |       |   |     |   |  |   |      |    
|Revenues from external customers                 |  | $             | 222 |   |               | $     | 113 | (2)   |  | $ | 27       |   |  | $            | 22 |  |       | $ | 3   |   |  | $ | 387  |    
|Intersegment revenues                            |  |               | 4   |   |               |       | 18  |       |  |   |         |   |  |              |   |  |       |   | (6  | ) |  |   | 16   | (3)
|Operation and maintenance                        |  |               | 73  |   |               |       | 40  |       |  |   | 18       |   |  |              | 1  |  |       |   | 19  |   |  |   | 151  |    
|Depreciation, depletion and amortization         |  |               | 35  |   |               |       | 74  |       |  |   | 1        |   |  |              |   |  |       |   |    |   |  |   | 110  |    
|Operating income (loss)                          |  | $             | 55  |   |               | $     | 5   |       |  | $ | 1        |   |  | $            | 7  |  |       | $ | (18 | ) |  | $ | 50   |    
|Earnings (losses) from unconsolidated affiliates |  |               | 27  |   |               |       |    |       |  |   | (158     | ) |  |              | 5  |  |       |   |    |   |  |   | (126 | )  
|Other income, net                                |  |               | 2   |   |               |       |    |       |  |   | 3        |   |  |              |   |  |       |   | 1   |   |  |   | 6    |    
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |    |  |       |  
|EBIT                                             |  | $             | 84  |   |               | $     | 5   |       |  | $ | (154     | ) |  | $            | 12 |  |       | $ | (17 | ) |  | $ | (70  | )  
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |    |  |       |  
|2004                                             |  |               |     |   |               |       |     |       |  |   |          |   |  |              |    |  |       |   |     |   |  |   |      |    
|Revenues from external customers                 |  | $             | 186 |   |               | $     | 151 | (2)   |  | $ | 28       |   |  | $            | 80 |  |       | $ | 14  |   |  | $ | 459  |    
|Intersegment revenues                            |  |               | 1   |   |               |       | 14  |       |  |   |         |   |  |              | 1  |  |       |   | (3  | ) |  |   | 13   | (3)
|Operation and maintenance                        |  |               | 68  |   |               |       | 46  |       |  |   | 25       |   |  |              |   |  |       |   | 2   |   |  |   | 141  |    
|Depreciation, depletion and amortization         |  |               | 31  |   |               |       | 78  |       |  |   | 3        |   |  |              | 1  |  |       |   | 2   |   |  |   | 115  |    
|(Gain) loss on long-lived assets                 |  |               | (1  | ) |               |       |    |       |  |   | 5        |   |  |              | 2  |  |       |   |    |   |  |   | 6    |    
|Operating income (loss)                          |  | $             | 58  |   |               | $     | 31  |       |  | $ | (10      | ) |  | $            | 2  |  |       | $ | (2  | ) |  | $ | 79   |    
|Earnings (losses) from unconsolidated affiliates |  |               | 16  |   |               |       | (1  | )     |  |   | 2        |   |  |              | 5  |  |       |   |    |   |  |   | 22   |    
|Other income, net                                |  |               | 6   |   |               |       | 1   |       |  |   | 7        |   |  |              |   |  |       |   | 2   |   |  |   | 16   |    
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |    |  |       |  
|EBIT                                             |  | $             | 80  |   |               | $     | 31  |       |  | $ | (1       | ) |  | $            | 7  |  |       | $ |    |   |  | $ | 117  |    
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |    |  |       |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes eliminations of intercompany transactions. Our
    intersegment revenues, along with our intersegment operating
    expenses, were incurred in the normal course of business between
    our operating segments. For the quarters ended
    September 30, 2005 and 2004, we recorded an intersegment
    revenue elimination of $6 million and $3 million,
    which is included in the Corporate column, to remove
    intersegment transactions.
|   
|(2) | Revenues from external customers include gains and losses
    related to our hedging of price risk with our affiliate
    associated with our natural gas and oil production.                                                                                                                                                                                                                                                                                
|   
|(3) | Relates to intercompany activity between our continuing
    operations and our discontinued operations.                                                                                                                                                                                                                                                                                                                                                      

17



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|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |     |  |       |   |     |   |  |   |       |    
|------------------------------------------------ |  | ------------- | --- | - | ------------- | ----- | --- | ----- |  | - | -------- | - |  | ------------ | --- |  | ----- | - | --- | - |  | - | ----- | ---
|                                                 |  | Regulated     |     |   | Non-Regulated |       |     |       |  |  
|                                                 |  |               |     |   |               |       |     |       |  |  
|                                                 |  |               |     |   |               | Field |     |       |  |   |         
|Nine Months Ended September 30,                  |  | Pipelines     |     |   | Production    |       |     | Power |  |   | Services |   |  | Corporate(1) |     |  | Total |  
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |     |  |       |  
|                                                 |  | (In millions) |     |   |              
|2005                                             |  |               |     |   |               |       |     |       |  |   |          |   |  |              |     |  |       |   |     |   |  |   |       |    
|Revenues from external customers                 |  | $             | 756 |   |               | $     | 339 | (2)   |  | $ | 76       |   |  | $            | 93  |  |       | $ | 17  |   |  | $ | 1,281 |    
|Intersegment revenues                            |  |               | 19  |   |               |       | 57  |       |  |   |         |   |  |              | 1   |  |       |   | (26 | ) |  |   | 51    | (3)
|Operation and maintenance                        |  |               | 210 |   |               |       | 120 |       |  |   | 57       |   |  |              |    |  |       |   | 19  |   |  |   | 406   |    
|Depreciation, depletion and amortization         |  |               | 110 |   |               |       | 230 |       |  |   | 6        |   |  |              | 1   |  |       |   | 4   |   |  |   | 351   |    
|Loss on long-lived assets                        |  |               |    |   |               |       |    |       |  |   | 60       |   |  |              | 4   |  |       |   |    |   |  |   | 64    |    
|Operating income (loss)                          |  | $             | 316 |   |               | $     | 23  |       |  | $ | (65      | ) |  | $            | 12  |  |       | $ | (17 | ) |  | $ | 269   |    
|Earnings (losses) from unconsolidated affiliates |  |               | 62  |   |               |       |    |       |  |   | (277     | ) |  |              | 4   |  |       |   |    |   |  |   | (211  | )  
|Other income, net                                |  |               | 6   |   |               |       | 2   |       |  |   | 16       |   |  |              |    |  |       |   | 3   |   |  |   | 27    |    
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |     |  |       |  
|EBIT                                             |  | $             | 384 |   |               | $     | 25  |       |  | $ | (326     | ) |  | $            | 16  |  |       | $ | (14 | ) |  | $ | 85    |    
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |     |  |       |  
|2004                                             |  |               |     |   |               |       |     |       |  |   |          |   |  |              |     |  |       |   |     |   |  |   |       |    
|Revenues from external customers                 |  | $             | 612 |   |               | $     | 476 | (2)   |  | $ | 127      |   |  | $            | 103 |  |       | $ | 44  |   |  | $ | 1,362 |    
|Intersegment revenues                            |  |               | 1   |   |               |       | 35  |       |  |   |         |   |  |              | 1   |  |       |   | (3  | ) |  |   | 34    | (3)
|Operation and maintenance                        |  |               | 181 |   |               |       | 123 |       |  |   | 70       |   |  |              | 1   |  |       |   | 2   |   |  |   | 377   |    
|Depreciation, depletion and amortization         |  |               | 91  |   |               |       | 234 |       |  |   | 9        |   |  |              | 2   |  |       |   | 6   |   |  |   | 342   |    
|(Gain) loss on long-lived assets                 |  |               | (1  | ) |               |       |    |       |  |   | 92       |   |  |              | 3   |  |       |   |    |   |  |   | 94    |    
|Operating income (loss)                          |  | $             | 239 |   |               | $     | 135 |       |  | $ | (84      | ) |  | $            | 5   |  |       | $ | 3   |   |  | $ | 298   |    
|Earnings (losses) from unconsolidated affiliates |  |               | 55  |   |               |       | (3  | )     |  |   | 20       |   |  |              | 9   |  |       |   |    |   |  |   | 81    |    
|Other income, net                                |  |               | 7   |   |               |       | 1   |       |  |   | 16       |   |  |              |    |  |       |   | 5   |   |  |   | 29    |    
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |     |  |       |  
|EBIT                                             |  | $             | 301 |   |               | $     | 133 |       |  | $ | (48      | ) |  | $            | 14  |  |       | $ | 8   |   |  | $ | 408   |    
|                                                 |  |               |     |   |               |       |     |       |  |   |          |   |  |              |     |  |       |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes eliminations of intercompany transactions. Our
    intersegment revenues, along with our intersegment operating
    expenses, were incurred in the normal course of business between
    our operating segments. For the nine months ended
    September 30, 2005 and 2004, we recorded an intersegment
    revenue elimination of $26 million and $3 million,
    which is included in the Corporate column, to remove
    intersegment transactions.
|   
|(2) | Revenues from external customers include gains and losses
    related to our hedging of price risk with our affiliate
    associated with our natural gas and oil production.                                                                                                                                                                                                                                                                                    
|   
|(3) | Relates to intercompany activity between our continuing
    operations and our discontinued operations.                                                                                                                                                                                                                                                                                                                                                          



|                        |                |                           |     |       |              |  |     |       |       | 
|----------------------- | -------------- | ------------------------- | --- | ----- | ------------ |  | --- | ----- | ----- | 
|                        |                | September 30,             |     |       | December 31, | 
|                        |                | 2005                      |     |       | 2004         | 
|                        |                |                           |     |       |              | 
|                        |                | (In millions)             |    
|Regulated               |                |                           |     |       |              |  |     |      
|                        | Pipelines      |                           | $   | 5,808 |              |  | $   | 5,717 |      
|Non-regulated           |                |                           |     |       |              |  |     |      
|                        | Production     |                           |     | 2,005 |              |  |     | 2,000 |      
|                        | Power          |                           |     | 397   |              |  |     | 716   |      
|                        | Field Services |                           |     | 121   |              |  |     | 144   |      
|                        |                |                           |     |       |              | 
|                        |                | Total segment assets      |     |       | 8,331        |  |     |       | 8,577 | 
|Corporate               |                |                           | 714 |       |              |  | 493 |      
|Discontinued operations |                |                           | 197 |       |              |  | 274 |      
|                        |                |                           |     |       |              | 
|                        |                | Total consolidated assets |     | $     | 9,242        |  |     | $     | 9,344 | 
|                        |                |                           |     |       |              | 



|    |                                                                            
|--- | ---------------------------------------------------------------------------
|10. | Investments in Unconsolidated Affiliates and Related Party
    Transactions



18



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|                                                       |                                                           |                |  |                |               |          |                |               |      |   |      |    |    |      |      |      |      |   |    |    |    | 
|------------------------------------------------------ | --------------------------------------------------------- | -------------- |  | -------------- | ------------- | -------- | -------------- | ------------- | ---- | - | ---- | -- | -- | ---- | ---- | ---- | ---- | - | -- | -- | -- | 
|                                                       |                                                           |                |  |                |               | Earnings |               
|                                                       |                                                           |                |  | Earnings       |               |          | (Losses) from  |              
|                                                       |                                                           |                |  | (Losses) from  |               |          | Unconsolidated |              
|                                                       |                                                           |                |  | Unconsolidated |               |          | Affiliates     |              
|                                                       |                                                           |                |  | Affiliates     |               |          |                |              
|                                                       |                                                           | Net            |  |                |               |          |                |              
|                                                       |                                                           | Ownership      |  |                |               |          | Nine Months    |              
|                                                       |                                                           | Interest       |  |                | Quarter Ended |          |                | Ended         |     
|                                                       |                                                           |                |  |                | September 30, |          |                | September 30, |     
|                                                       |                                                           | September 30,  |  |                |               |          |                |               |     
|                                                       |                                                           | 2005           |  |                | 2005          |          |                | 2004          |      |   | 2005 |    |    | 2004 |     
|                                                       |                                                           |                |  |                |               |          |                |               |      |   |      |    |    |      |     
|                                                       |                                                           | (Percent)      |  |                |              
|                                                       |                                                           |                |  | (In millions)  |              
|Domestic:                                              |                                                           |                |  |                |               |          |                |               |      |   |      |    |    |      |      |      |      |   |    |   
|                                                       | Great Lakes Gas Transmission LP and Company (Great Lakes) |                |  | 50             |               |          | $              | 15            |      |   | $    | 14 |    |      | $    | 46   |      |   | $  | 50 |   
|                                                       | Midland Cogeneration Venture
    (MCV)(1)                 |                |  | 44             |               |          |                | (159          | )    |   |      | (4 | )  |      |      | (162 | )    |   |    | (1 | ) 
|                                                       | Javelina(2)                                               |                |  | 40             |               |          |                | 5             |      |   |      | 4  |    |      |      | 7    |      |   |    | 9  |   
|                                                       | Other Domestic
    Investments(3)                         |                |  | various        |               |          |                | 12            |      |   |      | 2  |    |      |      | 13   |      |   |    | 1  |   
|                                                       |                                                           |                |  |                |               |          |                |               |      |   |      |    |    |      |     
|                                                       |                                                           | Total domestic |  |                |               |          |                |               | (127 | ) |      |    | 16 |      |      |      | (96  | ) |    |    | 59 | 
|                                                       |                                                           |                |  |                |               |          |                |               |      |   |      |    |    |      |     
|Foreign:                                               |                                                           |                |  |                |               |          |                |               |      |   |      |    |    |      |      |      |      |   |    |   
|                                                       | Asia
    Investments(4)                                   |                |  | various        |               |          |                | 1             |      |   |      | 2  |    |      |      | (66  | )    |   |    | 15 |   
|                                                       | Central American
    Investments(5)                       |                |  | various        |               |          |                |              |      |   |      | 4  |    |      |      | (49  | )    |   |    | 7  |   
|                                                       |                                                           |                |  |                |               |          |                |               |      |   |      |    |    |      |     
|                                                       |                                                           | Total foreign  |  |                |               |          |                |               | 1    |   |      |    | 6  |      |      |      | (115 | ) |    |    | 22 | 
|                                                       |                                                           |                |  |                |               |          |                |               |      |   |      |    |    |      |     
|Total earnings (losses) from unconsolidated affiliates |                                                           |                |  |                |               | $        | (126           | )             |      | $ | 22   |    |    | $    | (211 | )    |      | $ | 81 |   
|                                                       |                                                           |                |  |                |               |          |                |               |      |   |      |    |    |      |     






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes our proportionate share of a significant impairment
    recorded by MCV during the third quarter of 2005. As a result of
    this impairment, our remaining investment in MCV consists solely
    of our share of MCVs accumulated other comprehensive
    income of approximately $78 million as of
    September 30, 2005.                                                                                                                                                                                                                                           
|   
|(2) | We sold our interest in November 2005 and we will record a gain
    of approximately $100 million in the fourth quarter of 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(3) | Includes our interest in the Fort Union gathering system assets.
    We sold this investment in the third quarter of 2005 and
    recorded a gain of approximately $11 million.                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(4) | Consists of our investments in six power plants, including
    Habibullah Power and Saba Power Company. Our proportionate share
    of earnings (losses) reported by our Asia investments was
    $(3) million and $8 million for the quarter and
    nine months ended September 30, 2005. We
    (increased) decreased our proportionate share of equity earnings
    for our Asia investments by $(4) million and
    $1 million for the quarter and nine months ended
    September 30, 2005 to reflect the amount of earnings
    (losses) that we believe will be realized.
|   
|(5) | Consists of our investments in six power plants. Our
    proportionate share of earnings reported by our Central American
    investments was $5 million and $13 million for the
    quarter and nine months ended September 30, 2005. We
    decreased our proportionate share of equity earnings for our
    Central American investments by $5 million for the quarter
    and nine months ended September 30, 2005 to reflect the
    amount of earnings we believe will be realized.                                                                                        



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|                        |                                          |                             |   |       |                                 |  |       |             |  |  |       |     |  |       |   |      |       |  |   |             |   |  |       |    |  |  |   |     |  |  |   |      |  
|----------------------- | ---------------------------------------- | --------------------------- | - | ----- | ------------------------------- |  | ----- | ----------- |  |  | ----- | --- |  | ----- | - | ---- | ----- |  | - | ----------- | - |  | ----- | -- |  |  | - | --- |  |  | - | ---- | -
|                        |                                          | Quarter Ended September 30, |   |       | Nine Months Ended September 30, | 
|                        |                                          |                             |   |       |                                 | 
|                        |                                          |                             |   | Great |                                 |  | Other |             |  |  |       |     |  | Great |   |      | Other |  |   |            
|                        |                                          | MCV                         |   |       | Lakes                           |  |       | Investments |  |  | Total |     |  | MCV   |   |      | Lakes |  |   | Investments |   |  | Total |   
|                        |                                          |                             |   |       |                                 |  |       |             |  |  |       |     |  |       |   |      |       |  |   |             |   |  |       |   
|                        |                                          | (In millions)               |  
|2005                    |                                          |                             |   |       |                                 |  |       |             |  |  |       |     |  |       |   |      |       |  |   |             |   |  |       |    |  |  |   |     |  |  |   |     
|Operating results data: |                                          |                             |   |       |                                 |  |       |             |  |  |       |     |  |       |   |      |       |  |   |             |   |  |       |    |  |  |   |     |  |  |   |     
|                        | Operating revenues                       |                             | $ | 67    |                                 |  | $     | 32          |  |  | $     | 144 |  |       | $ | 243  |       |  | $ | 194         |   |  | $     | 98 |  |  | $ | 310 |  |  | $ | 602  |  
|                        | Operating expenses                       |                             |   | 475   |                                 |  |       | 15          |  |  |       | 125 |  |       |   | 615  |       |  |   | 509         |   |  |       | 43 |  |  |   | 235 |  |  |   | 787  |  
|                        | Income (loss) from continuing operations |                             |   | (418  | )                               |  |       | 9           |  |  |       | 11  |  |       |   | (398 | )     |  |   | (343        | ) |  |       | 30 |  |  |   | 33  |  |  |   | (280 | )
|                        | Net income
    (loss)(1)                 |                             |   | (418  | )                               |  |       | 9           |  |  |       | 11  |  |       |   | (398 | )     |  |   | (343        | ) |  |       | 30 |  |  |   | 33  |  |  |   | (280 | )
|2004                    |                                          |                             |   |       |                                 |  |       |             |  |  |       |     |  |       |   |      |       |  |   |             |   |  |       |    |  |  |   |     |  |  |   |     
|Operating results data: |                                          |                             |   |       |                                 |  |       |             |  |  |       |     |  |       |   |      |       |  |   |             |   |  |       |    |  |  |   |     |  |  |   |     
|                        | Operating revenues                       |                             | $ | 72    |                                 |  | $     | 31          |  |  | $     | 123 |  |       | $ | 226  |       |  | $ | 211         |   |  | $     | 99 |  |  | $ | 302 |  |  | $ | 612  |  
|                        | Operating expenses                       |                             |   | 66    |                                 |  |       | 15          |  |  |       | 104 |  |       |   | 185  |       |  |   | 179         |   |  |       | 41 |  |  |   | 250 |  |  |   | 470  |  
|                        | Income (loss) from continuing operations |                             |   | (4    | )                               |  |       | 9           |  |  |       | 12  |  |       |   | 17   |       |  |   | (1          | ) |  |       | 33 |  |  |   | 31  |  |  |   | 63   |  
|                        | Net income
    (loss)(1)                 |                             |   | (4    | )                               |  |       | 9           |  |  |       | 12  |  |       |   | 17   |       |  |   | (1          | ) |  |       | 33 |  |  |   | 31  |  |  |   | 63   |  






|    |                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes net income (loss) of $(2) million and
    $3 million for the quarters ended September 30, 2005,
    and 2004, and $10 million and $18 million for the nine
    months ended September 30, 2005 and 2004, related to our
    proportionate share of affiliates in which we hold a greater
    than 50 percent interest.



Related Party
Transactions




|                                     |  |               |    |             |               |   |     |      |  |   |      |  |  |   |     | 
|------------------------------------ |  | ------------- | -- | ----------- | ------------- | - | --- | ---- |  | - | ---- |  |  | - | --- | 
|                                     |  |               |    | Nine Months |              
|                                     |  | Quarter Ended |    |             | Ended         |  
|                                     |  | September 30, |    |             | September 30, |  
|                                     |  |               |    |             |               |  
|                                     |  | 2005          |    |             | 2004          |   |     | 2005 |  |   | 2004 | 
|                                     |  |               |    |             |               |   |     |      |  |   |      | 
|                                     |  | (In millions) |   
|Operating revenue                    |  | $             | 44 |             |               | $ | 158 |      |  | $ | 203  |  |  | $ | 422 | 
|Cost of sales                        |  |               | 6  |             |               |   | 45  |      |  |   | 29   |  |  |   | 58  | 
|Reimbursement for operating expenses |  |               | 1  |             |               |   | 1   |      |  |   | 2    |  |  |   | 2   | 
|Charges from affiliates              |  |               | 47 |             |               |   | 48  |      |  |   | 147  |  |  |   | 154 | 
|Other income                         |  |               | 3  |             |               |   | 3   |      |  |   | 10   |  |  |   | 10  | 

Revenues and Expenses.


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|                         |                                                 |                                            |   |     |              |  |   |     |     | 
|------------------------ | ----------------------------------------------- | ------------------------------------------ | - | --- | ------------ |  | - | --- | --- | 
|                         |                                                 | September 30,                              |   |     | December 31, | 
|                         |                                                 | 2005                                       |   |     | 2004         | 
|                         |                                                 |                                            |   |     |              | 
|                         |                                                 | (In millions)                              |  
|Current assets           |                                                 |                                            |   |     |              |  |   |    
|                         | Note receivable from
    affiliates(1)          |                                            | $ | 130 |              |  | $ | 177 |    
|                         | Accounts and notes receivable from affiliates   |                                            |   | 127 |              |  |   | 76  |    
|                         | Receivables from unconsolidated affiliates      |                                            |   | 23  |              |  |   | 11  |    
|                         |                                                 |                                            |   |     |              | 
|                         |                                                 | Accounts and notes receivable  affiliates |   | $   | 280          |  |   | $   | 264 | 
|Other non-current assets |                                                 |                                            |   |     |              |  |   |    
|                         | Note receivable from
    affiliate(2)           |                                            | $ | 345 |              |  | $ |    |    
|                         | Notes receivable from unconsolidated affiliates |                                            | $ | 42  |              |  | $ | 69  |    
|Current liabilities      |                                                 |                                            |   |     |              |  |   |    
|                         | Accounts payable  affiliates                   |                                            | $ | 52  |              |  | $ | 49  |    
|                         | Accounts payable  unconsolidated affiliates    |                                            |   | 7   |              |  |   | 12  |    
|                         |                                                 |                                            |   |     |              | 
|                         |                                                 | Accounts payable  affiliates              |   | $   | 59           |  |   | $   | 61  | 
|                         | Notes payable to affiliates                     |                                            | $ | 88  |              |  | $ | 45  |    
|                         | Note payable to
    affiliate(2)                |                                            |   |    |              |  |   | 166 |    
|                         |                                                 |                                            |   |     |              | 
|                         |                                                 | Notes payable to affiliates                |   | $   | 88           |  |   | $   | 211 | 




|    |                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Note receivable from affiliates at September 30, 2005 and
    December 31, 2004 were at an interest rate of 4.2% and 2.7%.                                                                                                                                        
|   
|(2) | Amount relates to El Pasos cash management program,
    as discussed below. Noncurrent note receivable from affiliate at
    September 30, 2005 was at an interest rate of 4.9% and note
    payable to affiliate at December 31, 2004 was at a rate of
    2.0%.

Cash Management Program and Affiliate
Receivables/Payables.


Affiliate income taxes.


Other.


Guarantees.


21



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Contingent Matters that Could Impact Our
Investments


Economic Conditions in the Dominican Republic.


22



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






Liquidity








Segment Results






23



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|                                                    |                                          |                                              |     |             |               |   |     |      |     |  |      |      |    |  |      |     |     | 
|--------------------------------------------------- | ---------------------------------------- | -------------------------------------------- | --- | ----------- | ------------- | - | --- | ---- | --- |  | ---- | ---- | -- |  | ---- | --- | --- | 
|                                                    |                                          |                                              |     | Nine Months |              
|                                                    |                                          | Quarter Ended                                |     |             | Ended         |  
|                                                    |                                          | September 30,                                |     |             | September 30, |  
|                                                    |                                          |                                              |     |             |               |  
|                                                    |                                          | 2005                                         |     |             | 2004          |   |     | 2005 |     |  | 2004 |     
|                                                    |                                          |                                              |     |             |               |   |     |      |     |  |      |     
|                                                    |                                          | (In millions)                                |    
|Regulated Business                                  |                                          |                                              |     |             |               |   |     |      |     |  |      |      |    |  |      |    
|                                                    | Pipelines                                |                                              | $   | 84          |               |   | $   | 80   |     |  | $    | 384  |    |  | $    | 301 |    
|Non-regulated Businesses                            |                                          |                                              |     |             |               |   |     |      |     |  |      |      |    |  |      |    
|                                                    | Production                               |                                              |     | 5           |               |   |     | 31   |     |  |      | 25   |    |  |      | 133 |    
|                                                    | Power                                    |                                              |     | (154        | )             |   |     | (1   | )   |  |      | (326 | )  |  |      | (48 | )  
|                                                    | Field Services                           |                                              |     | 12          |               |   |     | 7    |     |  |      | 16   |    |  |      | 14  |    
|                                                    |                                          |                                              |     |             |               |   |     |      |     |  |      |     
|                                                    |                                          | Segment EBIT                                 |     |             | (53           | ) |     |      | 117 |  |      |      | 99 |  |      |     | 400 | 
|Corporate                                           |                                          |                                              | (17 | )           |               |   |    |      |     |  | (14  | )    |    |  | 8    |    
|                                                    |                                          |                                              |     |             |               |   |     |      |     |  |      |     
|                                                    |                                          | Consolidated EBIT from continuing operations |     |             | (70           | ) |     |      | 117 |  |      |      | 85 |  |      |     | 408 | 
|Interest and debt expense                           |                                          |                                              | (72 | )           |               |   | (75 | )    |     |  | (222 | )    |    |  | (267 | )  
|Affiliated interest income (expense), net           |                                          |                                              | 4   |             |               |   | 5   |      |     |  | 10   |      |    |  | (4   | )  
|Income
    taxes(1)                                 |                                          |                                              | 46  |             |               |   | (17 | )    |     |  | 21   |      |    |  | (48  | )  
|                                                    |                                          |                                              |     |             |               |   |     |      |     |  |      |     
|                                                    | Income (loss) from continuing operations |                                              |     | (92         | )             |   |     | 30   |     |  |      | (106 | )  |  |      | 89  |    
|Discontinued operations, net of income
    taxes(1) |                                          |                                              | 11  |             |               |   | (4  | )    |     |  | 11   |      |    |  | (99  | )  
|                                                    |                                          |                                              |     |             |               |   |     |      |     |  |      |     
|                                                    | Net income (loss)                        |                                              | $   | (81         | )             |   | $   | 26   |     |  | $    | (95  | )  |  | $    | (10 | )  
|                                                    |                                          |                                              |     |             |               |   |     |      |     |  |      |     








|    |                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Nine months ended September 30, 2004 includes the
    restatement due to CTA impacts as described in Item I,
    Financial Statements, Note 1.

Individual Segment Results


Regulated Business  Pipelines Segment




Operating Results




|                            |                  |                                      |       |    |                   |   |       |      |  |   |       |     |  |   |       |     | 
|--------------------------- | ---------------- | ------------------------------------ | ----- | -- | ----------------- | - | ----- | ---- |  | - | ----- | --- |  | - | ----- | --- | 
|                            |                  | Quarter Ended                        |       |    | Nine Months Ended |  
|                            |                  | September 30,                        |       |    | September 30,     |  
|                            |                  |                                      |       |    |                   |  
|Pipelines Segment Results   |                  | 2005                                 |       |    | 2004              |   |       | 2005 |  |   | 2004  |    
|                            |                  |                                      |       |    |                   |   |       |      |  |   |       |    
|                            |                  | (In millions, except volume amounts) |      
|Operating revenues          |                  | $                                    | 226   |    |                   | $ | 187   |      |  | $ | 775   |     |  | $ | 613   |    
|Operating expenses          |                  |                                      | (171  | )  |                   |   | (129  | )    |  |   | (459  | )   |  |   | (374  | )  
|                            |                  |                                      |       |    |                   |   |       |      |  |   |       |    
|                            | Operating income |                                      |       | 55 |                   |   |       | 58   |  |   |       | 316 |  |   |       | 239 | 
|Other income, net           |                  |                                      | 29    |    |                   |   | 22    |      |  |   | 68    |     |  |   | 62    |    
|                            |                  |                                      |       |    |                   |   |       |      |  |   |       |    
|                            | EBIT             |                                      | $     | 84 |                   |   | $     | 80   |  |   | $     | 384 |  |   | $     | 301 | 
|                            |                  |                                      |       |    |                   |   |       |      |  |   |       |    
|Throughput volumes (BBtu/d) |                  |                                      | 8,595 |    |                   |   | 7,334 |      |  |   | 8,880 |     |  |   | 7,960 |    
|                            |                  |                                      |       |    |                   |   |       |      |  |   |       |    

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|                                                                                              |                      |                             |    |      |                                 |   |     |       |      |   |        |   |  |         |     |   |         |   |    |       |  |   |        |     |   |   |    |   |  |   |     |    | 
|--------------------------------------------------------------------------------------------- | -------------------- | --------------------------- | -- | ---- | ------------------------------- | - | --- | ----- | ---- | - | ------ | - |  | ------- | --- | - | ------- | - | -- | ----- |  | - | ------ | --- | - | - | -- | - |  | - | --- | -- | 
|                                                                                              |                      | Quarter Ended September 30, |    |      | Nine Months Ended September 30, |  
|                                                                                              |                      |                             |    |      |                                 |  
|                                                                                              |                      |                             |    | EBIT |                                 |   |     |       | EBIT |  
|                                                                                              |                      | Revenue                     |    |      | Expense                         |   |     | Other |      |   | Impact |   |  | Revenue |     |   | Expense |   |    | Other |  |   | Impact |    
|                                                                                              |                      |                             |    |      |                                 |   |     |       |      |   |        |   |  |         |     |   |         |   |    |       |  |   |        |    
|                                                                                              |                      | Favorable/(Unfavorable)     |    |      | Favorable/(Unfavorable)         |  
|                                                                                              |                      | (In millions)               |    |      | (In millions)                   |  
|Contract modifications/
    terminations/settlements                                          |                      | $                           |   |      |                                 | $ |    |       |      | $ |       |   |  | $       |    |   |         | $ | 43 |       |  | $ |       |     |   | $ | 1  |   |  | $ | 44  |   
|Gas not used in operations, revaluations, processing revenues
    and other natural gas sales |                      |                             | 17 |      |                                 |   | (28 | )     |      |   |       |   |  |         | (11 | ) |         |   | 65 |       |  |   | (42    | )   |   |   |   |   |  |   | 23  |   
|Pipeline expansions                                                                           |                      |                             | 17 |      |                                 |   | (7  | )     |      |   | (2     | ) |  |         | 8   |   |         |   | 46 |       |  |   | (21    | )   |   |   | (2 | ) |  |   | 23  |   
|Higher allocated costs                                                                        |                      |                             |   |      |                                 |   | (2  | )     |      |   |       |   |  |         | (2  | ) |         |   |   |       |  |   | (16    | )   |   |   |   |   |  |   | (16 | ) 
|Equity earnings from our investment in Great Lakes                                            |                      |                             |   |      |                                 |   |    |       |      |   | 1      |   |  |         | 1   |   |         |   |   |       |  |   |       |     |   |   | (4 | ) |  |   | (4  | ) 
|Sale of interest in Ft. Union gathering system                                                |                      |                             |   |      |                                 |   |    |       |      |   | 11     |   |  |         | 11  |   |         |   |   |       |  |   |       |     |   |   | 11 |   |  |   | 11  |   
|Other(1)                                                                                      |                      |                             | 5  |      |                                 |   | (5  | )     |      |   | (3     | ) |  |         | (3  | ) |         |   | 8  |       |  |   | (6     | )   |   |   |   |   |  |   | 2   |   
|                                                                                              |                      |                             |    |      |                                 |   |     |       |      |   |        |   |  |         |     |   |         |   |    |       |  |   |        |    
|                                                                                              | Total impact on EBIT |                             | $  | 39   |                                 |   | $   | (42   | )    |   | $      | 7 |  |         | $   | 4 |         |   | $  | 162   |  |   | $      | (85 | ) |   | $  | 6 |  |   | $   | 83 | 
|                                                                                              |                      |                             |    |      |                                 |   |     |       |      |   |        |   |  |         |     |   |         |   |    |       |  |   |        |    






|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(1) | Consists of individually insignificant items across several of
    our pipeline systems.



Contract Modifications/Terminations/Settlements.


Gas Not Used in Operations, Revaluations, Processing Revenues
and Other Natural Gas Sales.


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Expansions.






Allocated Costs.


Accounting for Pipeline Integrity Costs.


Other.






| |                             
| | ----------------------------
| | Regulatory and Other Matters



CIG Rate Case.


26



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Non-regulated Business  Production Segment




| |         
| | --------
| | Overview





| |                                                            
| | -----------------------------------------------------------
| | Significant Operational Factors Since December 31,
    2004





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Change in realized prices. Realized natural gas prices,
    excluding hedges, increased 17 percent compared to 2004.
    However, under our hedge program, approximately 66 percent
    of our natural gas production for the first nine months of 2005
    was hedged at an average price of $3.31 per MMBtu,
    significantly below the market price of natural gas.
    Accordingly, we realized natural gas prices, including hedges,
    that were 22 percent lower than in 2004. Realized prices
    for oil, condensate and NGL prices, which are not hedged,
    increased 35 percent compared to 2004.                                           
|
| |  | Average daily production of 284 MMcfe/d. Our average
    daily production in the third quarter of 2005 declined by
    12 percent from the second quarter of 2005 mainly due to
    several hurricanes in the Gulf of Mexico during the third
    quarter of 2005 as discussed below, which caused us to shut in
    significant volumes in our offshore region. Our production
    volumes after adjustments for the impact of the hurricanes have
    declined as our drilling program and the acquisitions of
    producing properties have not been sufficient to offset normal
    production declines.                                               
|
| |  | Impact of hurricanes on production volumes. During the
    third quarter of 2005, our average daily production levels in
    the Gulf of Mexico were negatively impacted by 16 MMcfe/d
    due to Hurricanes Katrina and Rita. Prior to Hurricane Rita we
    were producing about 55 MMcfe/d from our offshore region.
    As of November 2005, we have brought online approximately 25
    MMcfe/d of our offshore production. We will continue to bring
    Gulf of Mexico production back online during the remainder of
    the fourth quarter but do not expect all of our offshore
    production to be back online until the first quarter of 2006.
|
| |  | Capital expenditures of $203 million.Our capital
    expenditures for the nine months ended
    September 30, 2005 include the acquisition of the
    interest held by one of our partners under a net profits
    interest agreement and other offshore acquisitions totaling
    $44 million. These acquisitions added properties with
    approximately 18 Bcfe of proved reserves.                                                                                                                                                                                                                                                                     



| |                                      
| | -------------------------------------
| | Outlook for last three months of 2005





| |                          
| | -------------------------
| | Production Hedge Position



27



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| |                  
| | -----------------
| | Operating Results



|                                            |                         |                          |    |    |                   |  |    |      |     |  |      |     |     |  |     |     |     | 
|------------------------------------------- | ----------------------- | ------------------------ | -- | -- | ----------------- |  | -- | ---- | --- |  | ---- | --- | --- |  | --- | --- | --- | 
|                                            |                         | Quarter Ended            |    |    | Nine Months Ended | 
|                                            |                         | September 30,            |    |    | September 30,     | 
|                                            |                         |                          |    |    |                   | 
|Production Segment Results                  |                         | 2005                     |    |    | 2004              |  |    | 2005 |     |  | 2004 |    
|                                            |                         |                          |    |    |                   |  |    |      |     |  |      |    
|                                            |                         | (In millions)            |   
|Operating revenues:                         |                         |                          |    |    |                   |  |    |      |     |  |      |     |     |  |     |    
|                                            | Natural gas             |                          | $  | 72 |                   |  | $  | 126  |     |  | $    | 238 |     |  | $   | 399 |    
|                                            | Oil, condensate and NGL |                          |    | 58 |                   |  |    | 39   |     |  |      | 156 |     |  |     | 111 |    
|                                            | Other                   |                          |    | 1  |                   |  |    |     |     |  |      | 2   |     |  |     | 1   |    
|                                            |                         |                          |    |    |                   |  |    |      |     |  |      |    
|                                            |                         | Total operating revenues |    |    | 131               |  |    |      | 165 |  |      |     | 396 |  |     |     | 511 | 
|Transportation and net product
    costs(1) |                         |                          | (3 | )  |                   |  | (4 | )    |     |  | (9   | )   |     |  | (11 | )  
|                                            |                         |                          |    |    |                   |  |    |      |     |  |      |    
|                                            |                         | Total operating margin   |    |    | 128               |  |    |      | 161 |  |      |     | 387 |  |     |     | 500 | 

|                       |                                              |                                 |   |     |      |   |   |     |      |   |   |      |      |   |    |      |      |  
|---------------------- | -------------------------------------------- | ------------------------------- | - | --- | ---- | - | - | --- | ---- | - | - | ---- | ---- | - | -- | ---- | ---- | -
|Operating expenses:    |                                              |                                 |   |     |      |   |   |     |      |   |   |      |      |   |    |     
|                       | Depreciation, depletion and amortization     |                                 |   | (74 | )    |   |   | (78 | )    |   |   | (230 | )    |   |    | (234 | )   
|                       | Production
    costs(2)                      |                                 |   | (29 | )    |   |   | (34 | )    |   |   | (79  | )    |   |    | (77  | )   
|                       | General and administrative expenses          |                                 |   | (20 | )    |   |   | (19 | )    |   |   | (52  | )    |   |    | (55  | )   
|                       | Taxes other than production and income taxes |                                 |   |    |      |   |   | 1   |      |   |   | (3   | )    |   |    | 1    |     
|                       |                                              |                                 |   |     |      |   |   |     |      |   |   |     
|                       |                                              | Total operating
    expenses(1) |   |     | (123 | ) |   |     | (130 | ) |   |      | (364 | ) |    |      | (365 | )
|                       |                                              |                                 |   |     |      |   |   |     |      |   |   |     
|                       | Operating income                             |                                 |   | 5   |      |   |   | 31  |      |   |   | 23   |      |   |    | 135  |     
|Other income (expense) |                                              |                                 |  |     |      |   |  |     |      |   | 2 |      |      |   | (2 | )   
|                       |                                              |                                 |   |     |      |   |   |     |      |   |   |     
|                       | EBIT                                         |                                 | $ | 5   |      |   | $ | 31  |      |   | $ | 25   |      |   | $  | 133  |     
|                       |                                              |                                 |   |     |      |   |   |     |      |   |   |     

|                                                  |                               |                                                         |                              |         |                   |      |        |          |         |      |      |    |     |      |        |      |          |      |        |      |        |      |     |    |     |    |  
|------------------------------------------------- | ----------------------------- | ------------------------------------------------------- | ---------------------------- | ------- | ----------------- | ---- | ------ | -------- | ------- | ---- | ---- | -- | --- | ---- | ------ | ---- | -------- | ---- | ------ | ---- | ------ | ---- | --- | -- | --- | -- | -
|                                                  |                               | Quarter Ended                                           |                              |         | Nine Months Ended |     
|                                                  |                               | September 30,                                           |                              |         | September 30,     |     
|                                                  |                               |                                                         |                              |         |                   |     
|                                                  |                               |                                                         |                              | Percent |                   |      |        |          | Percent |     
|                                                  |                               | 2005                                                    |                              |         | 2004              |      |        | Variance |         |      | 2005 |    |     | 2004 |        |      | Variance |     
|                                                  |                               |                                                         |                              |         |                   |      |        |          |         |      |      |    |     |      |        |      |          |     
|Volumes, prices and costs:                        |                               |                                                         |                              |         |                   |      |        |          |         |      |      |    |     |      |        |      |          |      |        |      |        |      |     |   
|                                                  | Natural gas                   |                                                         |                              |         |                   |      |        |          |         |      |      |    |     |      |        |      |          |      |        |      |        |      |     |    |    
|                                                  |                               | Volumes (MMcf)                                          |                              |         | 17,125            |      |        |          | 23,448  |      |      |    | (27 | )%   |        |      | 56,982   |      |        |      | 74,322 |      |     |    | (23 | )%
|                                                  |                               | Average realized prices including hedges
    ($/Mcf)(3) |                              | $       | 4.21              |      |        | $        | 5.37    |      |      |    | (22 | )%   |        | $    | 4.18     |      |        | $    | 5.37   |      |     |    | (22 | )%
|                                                  |                               | Average realized prices excluding hedges
    ($/Mcf)(3) |                              | $       | 7.95              |      |        | $        | 5.75    |      |      |    | 38  | %    |        | $    | 6.78     |      |        | $    | 5.80   |      |     |    | 17  | % 
|                                                  |                               | Average transportation costs ($/Mcf)                    |                              | $       | 0.09              |      |        | $        | 0.12    |      |      |    | (25 | )%   |        | $    | 0.11     |      |        | $    | 0.10   |      |     |    | 10  | % 
|                                                  | Oil, condensate and NGL       |                                                         |                              |         |                   |      |        |          |         |      |      |    |     |      |        |      |          |      |        |      |        |      |     |    |    
|                                                  |                               | Volumes (MBbls)                                         |                              |         | 1,098             |      |        |          | 1,039   |      |      |    | 6   | %    |        |      | 3,445    |      |        |      | 3,299  |      |     |    | 4   | % 
|                                                  |                               | Average realized prices ($/Bbl)
    (3)(4)              |                              | $       | 52.41             |      |        | $        | 37.29   |      |      |    | 41  | %    |        | $    | 45.18    |      |        | $    | 33.54  |      |     |    | 35  | % 
|                                                  |                               | Average transportation costs ($/Bbl)                    |                              | $       | 0.68              |      |        | $        | 1.12    |      |      |    | (39 | )%   |        | $    | 0.68     |      |        | $    | 1.16   |      |     |    | (41 | )%
|Total equivalent volumes (MMcfe)                  |                               |                                                         | 23,716                       |         |                   |      | 29,684 |          |         |      | (20  | )% |     |      | 77,653 |      |          |      | 94,119 |      |        |      | (17 | )%
|Production cost ($/Mcfe)                          |                               |                                                         |                              |         |                   |      |        |          |         |      |      |    |     |      |        |      |          |      |        |      |        |      |     |   
|                                                  | Average lease operating costs |                                                         | $                            | 0.91    |                   |      | $      | 0.91     |         |      |      |   | %   |      | $      | 0.88 |          |      | $      | 0.72 |        |      |     | 22 | %  
|                                                  | Average production taxes      |                                                         |                              | 0.37    |                   |      |        | 0.23     |         |      |      | 61 | %   |      |        | 0.15 |          |      |        | 0.09 |        |      |     | 67 | %  
|                                                  |                               |                                                         |                              |         |                   |      |        |          |         |      |      |    |     |      |        |      |          |     
|                                                  |                               |                                                         | Total production
    cost(2) |         | $                 | 1.28 |        |          | $       | 1.14 |      |    |     | 12   | %      |      | $        | 1.03 |        |      | $      | 0.81 |     |    |     | 27 | %
|                                                  |                               |                                                         |                              |         |                   |      |        |          |         |      |      |    |     |      |        |      |          |     
|Average general and administrative costs ($/Mcfe) |                               | $                                                       | 0.82                         |         |                   | $    | 0.63   |          |         |      | 30   | %  |     | $    | 0.67   |      |          | $    | 0.59   |      |        |      | 14  | % 
|Unit of production depletion cost ($/Mcfe)        |                               | $                                                       | 2.92                         |         |                   | $    | 2.48   |          |         |      | 18   | %  |     | $    | 2.81   |      |          | $    | 2.35   |      |        |      | 20  | % 




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|    |                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------
|(1) | Transportation and net product costs are included in operating
    expenses on our consolidated statements of income.      
|(2) | Production costs include lease operating costs and production
    related taxes (including ad valorem and severance taxes).
|(3) | Prices are stated before transportation costs.                                                                             
|(4) | We do not have any hedges associated with our oil, condensate
    and NGL volumes.                                         



| |                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------
| | Quarter and Nine Months Ended September 30, 2005
    Compared to Quarter and Nine Months Ended 
     September 30, 2004



|                                                 |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |      |      |  
|------------------------------------------------ | ----------------------------------------------- | ----------------------- | - | ---- | --------- | - | - | -------- | - | ---- | ------ | - | - |  | - | ---- | ---- | -
|                                                 |                                                 | Variance                |  
|                                                 |                                                 |                         |  
|                                                 |                                                 | Operating               |   |      | Operating |   |   |          |   | EBIT |       
|                                                 |                                                 | Revenue                 |   |      | Expense   |   |   | Other(1) |   |      | Impact |  
|                                                 |                                                 |                         |   |      |           |   |   |          |   |      |        |  
|                                                 |                                                 | Favorable/(Unfavorable) |  
|                                                 |                                                 | (In millions)           |  
|Quarter Ended September 30,                      |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|Natural Gas Revenue                              |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Higher realized prices in 2005                  |                         | $ | 38   |           |   | $ |         |   |      | $      |  |   |  | $ | 38   |     
|                                                 | Lower volumes in 2005                           |                         |   | (37  | )         |   |   |         |   |      |        |  |   |  |   | (37  | )   
|                                                 | Impact from hedge program in 2005 versus 2004   |                         |   | (55  | )         |   |   |         |   |      |        |  |   |  |   | (55  | )   
|Oil, Condensate and NGL Revenue                  |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Higher realized prices in 2005                  |                         |   | 17   |           |   |   |         |   |      |        |  |   |  |   | 17   |     
|                                                 | Higher volumes in 2005                          |                         |   | 2    |           |   |   |         |   |      |        |  |   |  |   | 2    |     
|Depreciation, Depletion and Amortization Expense |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Higher depletion rate in 2005                   |                         |   |     |           |   |   | (11      | ) |      |        |  |   |  |   | (11  | )   
|                                                 | Lower production volumes in 2005                |                         |   |     |           |   |   | 15       |   |      |        |  |   |  |   | 15   |     
|Production Costs                                 |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Lower lease operating costs in 2005             |                         |   |     |           |   |   | 6        |   |      |        |  |   |  |   | 6    |     
|                                                 | Higher production taxes in 2005                 |                         |   |     |           |   |   | (2       | ) |      |        |  |   |  |   | (2   | )   
|Other                                            |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Higher general and administrative costs in 2005 |                         |   |     |           |   |   | (1       | ) |      |        |  |   |  |   | (1   | )   
|                                                 | Other                                           |                         |   | 1    |           |   |   |         |   |      |        | 1 |   |  |   | 2    |     
|                                                 |                                                 |                         |   |      |           |   |   |          |   |      |        |  
|                                                 |                                                 | Total variances         |   | $    | (34       | ) |   | $        | 7 |      |        | $ | 1 |  |   | $    | (26  | )
|                                                 |                                                 |                         |   |      |           |   |   |          |   |      |        |  
|Nine Months Ended September 30,                  |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|Natural Gas Revenue                              |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Higher realized prices in 2005                  |                         | $ | 55   |           |   | $ |         |   |      | $      |  |   |  | $ | 55   |     
|                                                 | Lower volumes in 2005                           |                         |   | (100 | )         |   |   |         |   |      |        |  |   |  |   | (100 | )   
|                                                 | Impact from hedge program in 2005 versus 2004   |                         |   | (116 | )         |   |   |         |   |      |        |  |   |  |   | (116 | )   
|Oil, Condensate and NGL Revenue                  |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Higher realized prices in 2005                  |                         |   | 40   |           |   |   |         |   |      |        |  |   |  |   | 40   |     
|                                                 | Higher volumes in 2005                          |                         |   | 5    |           |   |   |         |   |      |        |  |   |  |   | 5    |     
|Depreciation, Depletion and Amortization Expense |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Higher depletion rate in 2005                   |                         |   |     |           |   |   | (36      | ) |      |        |  |   |  |   | (36  | )   
|                                                 | Lower production volumes in 2005                |                         |   |     |           |   |   | 39       |   |      |        |  |   |  |   | 39   |     
|Production Costs                                 |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Higher production taxes in 2005                 |                         |   |     |           |   |   | (3       | ) |      |        |  |   |  |   | (3   | )   
|Other                                            |                                                 |                         |   |      |           |   |   |          |   |      |        |   |   |  |   |     
|                                                 | Lower general and administrative costs in 2005  |                         |   |     |           |   |   | 3        |   |      |        |  |   |  |   | 3    |     
|                                                 | Other                                           |                         |   | 1    |           |   |   | (2       | ) |      |        | 6 |   |  |   | 5    |     
|                                                 |                                                 |                         |   |      |           |   |   |          |   |      |        |  
|                                                 |                                                 | Total variances         |   | $    | (115      | ) |   | $        | 1 |      |        | $ | 6 |  |   | $    | (108 | )
|                                                 |                                                 |                         |   |      |           |   |   |          |   |      |        |  






|    |                                                                            
|--- | ---------------------------------------------------------------------------
|(1) | Consists primarily of changes in transportation costs and other
    income.

Operating Revenues.


29



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Depreciation, depletion, and amortization expense.


Production costs.


Other.


Non-regulated Business  Power Segment






| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | Significant developments in our operations that occurred
    since December 31, 2004 include:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Asia. During 2005, we announced the sale of our Asian
    power assets. We recorded impairments on certain of these assets
    based on information received regarding the potential value we
    may receive when we sell them. We expect to substantially
    complete the sale of our remaining Asian assets in early 2006.
    We will continue to assess the fair value of those assets
    throughout the sales process, which may result in additional
    impairments or gains in future periods.                                                                                                                    
|
| |  | Other International Power. During the second quarter of
    2005, we engaged an investment banker to facilitate the sale of
    our Central American power assets. We recorded an impairment in
    the second quarter of 2005 based on information received about
    the value we may receive upon the sale of these assets. We will
    continue to assess the value of these assets throughout the
    sales process, which may result in additional impairments that
    may be significant. See Item 1, Financial Statements,
    Note 2 for further information on our divestitures.                                  
|
| |  | Midland Cogeneration Venture. In the fourth quarter of
    2004, we impaired our investment in MCV based on a decline in
    the carrying value of the investment due to increased fuel
    costs. During the third quarter of 2005, we recorded our
    proportionate share of a significant impairment recorded by MCV.
    As a result of this impairment, our remaining investment
    consists solely of our share of MCVs accumulated other
    comprehensive income. MCVs project owners are pursuing
    various alternatives which could result in the recovery of some
    of our previously impaired investment.

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| |                  
| | -----------------
| | Operating Results



|              |                                                  |                                                |                         |             |               |   |   |      |     |     |      |    |      |     |   |    |     |     |  
|------------- | ------------------------------------------------ | ---------------------------------------------- | ----------------------- | ----------- | ------------- | - | - | ---- | --- | --- | ---- | -- | ---- | --- | - | -- | --- | --- | -
|              |                                                  |                                                |                         | Nine Months |              
|              |                                                  | Quarter Ended                                  |                         |             | Ended         |  
|              |                                                  | September 30,                                  |                         |             | September 30, |  
|              |                                                  |                                                |                         |             |               |  
|              |                                                  | 2005                                           |                         |             | 2004          |   |   | 2005 |     |     | 2004 |   
|              |                                                  |                                                |                         |             |               |   |   |      |     |     |      |   
|              |                                                  | (In millions)                                  |                        
|Overall EBIT: |                                                  |                                                |                         |             |               |   |   |      |     |     |      |    |      |     |   |   
|              | Gross
    margin(1)                              |                                                | $                       | 20          |               |   | $ | 23   |     |     | $    | 58 |      |     | $ | 89 |    
|              | Operating expenses                               |                                                |                         |             |               |   |   |      |     |     |      |    |      |     |   |    |    
|              |                                                  | Loss on long-lived assets                      |                         |             |              |   |   |      | (5  | )   |      |    | (60  | )   |   |    | (92 | )  
|              |                                                  | Other operating expenses                       |                         |             | (19           | ) |   |      | (28 | )   |      |    | (63  | )   |   |    | (81 | )  
|              |                                                  |                                                |                         |             |               |   |   |      |     |     |      |   
|              |                                                  |                                                | Operating income (loss) |             |               | 1 |   |      |     | (10 | )    |    |      | (65 | ) |    |     | (84 | )
|              | Earnings (losses) from unconsolidated affiliates |                                                |                         |             |               |   |   |      |     |     |      |    |      |     |   |    |    
|              |                                                  | Losses from impairments, net of gains on sales |                         |             | (159          | ) |   |      |    |     |      |    | (292 | )   |   |    | 3   |    
|              |                                                  | Equity in earnings                             |                         |             | 1             |   |   |      | 2   |     |      |    | 15   |     |   |    | 17  |    
|              | Other income                                     |                                                |                         | 3           |               |   |   | 7    |     |     |      | 16 |      |     |   | 16 |    
|              |                                                  |                                                |                         |             |               |   |   |      |     |     |      |   
|              |                                                  | EBIT                                           |                         | $           | (154          | ) |   | $    | (1  | )   |      | $  | (326 | )   |   | $  | (48 | )  
|              |                                                  |                                                |                         |             |               |   |   |      |     |     |      |   






|    |                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Gross margin for our Power segment consists of revenues from our
    power plants and the revenues, cost of electricity purchases and
    changes in fair value of restructured power contracts. The cost
    of fuel used in the power generation process is included in
    operating expenses.



|                                   |                                    |                            |      |             |               |   |    |      |   |   |      |      |   |   |     |     |     |  
|---------------------------------- | ---------------------------------- | -------------------------- | ---- | ----------- | ------------- | - | -- | ---- | - | - | ---- | ---- | - | - | --- | --- | --- | -
|                                   |                                    |                            |      | Nine Months |              
|                                   |                                    | Quarter Ended              |      |             | Ended         |  
|                                   |                                    | September 30,              |      |             | September 30, |  
|                                   |                                    |                            |      |             |               |  
|                                   |                                    | 2005                       |      |             | 2004          |   |    | 2005 |   |   | 2004 |     
|                                   |                                    |                            |      |             |               |   |    |      |   |   |      |     
|                                   |                                    | (In millions)              |     
|EBIT by Area:                      |                                    |                            |      |             |               |   |    |      |   |   |      |      |   |   |     |    
|Asia and Other International Power |                                    |                            |      |             |               |   |    |      |   |   |      |      |   |   |     |    
|                                   | Earnings from plant operations     |                            | $    | 4           |               |   | $  | 5    |   |   | $    | 20   |   |   | $   | 22  |    
|                                   | Impairments, net - Central America |                            |      |            |               |   |    |     |   |   |      | (111 | ) |   |     |    |    
|                                   | Impairments - Asia                 |                            |      |            |               |   |    |     |   |   |      | (73  | ) |   |     |    |    
|Domestic Power                     |                                    |                            |      |             |               |   |    |      |   |   |      |      |   |   |     |    
|                                   | Power Contract Restructurings      |                            |      |             |               |   |    |      |   |   |      |      |   |   |     |     |    
|                                   |                                    | Impairments, net of losses |      |             |              |   |    |      |  |   |      |      |  |   |     |     | (87 | )
|                                   |                                    | Change in fair value       |      |             |              |   |    |      |  |   |      |      |  |   |     |     | 36  |  
|                                   | Losses from MCV investment         |                            |      | (159        | )             |   |    |     |   |   |      | (162 | ) |   |     |    |    
|                                   | Other Domestic Operations          |                            |      | 1           |               |   |    | (6   | ) |   |      |     |   |   |     | (19 | )  
|                                   |                                    |                            |      |             |               |   |    |      |   |   |      |     
|EBIT                               |                                    | $                          | (154 | )           |               | $ | (1 | )    |   | $ | (326 | )    |   | $ | (48 | )  
|                                   |                                    |                            |      |             |               |   |    |      |   |   |      |     

Asia and Other International Power.




Domestic Power Contract Restructurings.


31



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Non-regulated Business  Field Services Segment




Interest and Debt Expense




Affiliated Interest Income, Net




Income Taxes




|                   |  |                                 |     |   |                   |   |    |      |  |   |      |   |  |   |    |  
|------------------ |  | ------------------------------- | --- | - | ----------------- | - | -- | ---- |  | - | ---- | - |  | - | -- | -
|                   |  | Quarter Ended                   |     |   | Nine Months Ended |  
|                   |  | September 30,                   |     |   | September 30,     |  
|                   |  |                                 |     |   |                   |  
|                   |  | 2005                            |     |   | 2004              |   |    | 2005 |  |   | 2004 |  
|                   |  |                                 |     |   |                   |   |    |      |  |   |      |  
|                   |  | (In millions, except for rates) |    
|Income taxes       |  | $                               | (46 | ) |                   | $ | 17 |      |  | $ | (21  | ) |  | $ | 48 |  
|Effective tax rate |  |                                 | 33  | % |                   |   | 36 | %    |  |   | 17   | % |  |   | 35 | %





Discontinued Operations






32



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##### Table of Contents







Commitments and Contingencies




33



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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






| |   |                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------
| |  | capital and other expenditures;                                                                     
|
| |  | dividends;                                                                                          
|
| |  | financing plans;                                                                                    
|
| |  | capital structure;                                                                                  
|
| |  | liquidity and cash flow;                                                                            
|
| |  | pending legal proceedings, claims and governmental proceedings,
    including environmental matters;
|
| |  | future economic performance;                                                                        
|
| |  | operating income;                                                                                   
|
| |  | managements plans; and                                                                             
|
| |  | goals and objectives for future operations.                                                         



34



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








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

Material Weaknesses 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;                                                                                                                                                      
|
| |  | Rewrote the computer programs for Marketing and Tradings
    mark-to-market accounting system to significantly reduce the
    number of different combinations of user access and to modify
    remaining capabilities to eliminate potentially conflicting
    duties;
|
| |  | 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;                                                                                                                                                      
|
| |  | Implemented monitoring procedures to monitor activities of
    security administration roles for our applications described
    above;                                                                                                                                  
|
| |  | Formalized, issued and implemented various accounting policies
    including a company-wide account reconciliation policy and an
    accounting policy that requires a higher level of review of
    non-routine transactions;                                          
|
| |  | Implemented an account reconciliation monitoring tool that also
    allows for aggregation of unreconciled amounts;                                                                                                                                                     
|
| |  | Provided additional training regarding the company-wide account
    reconciliation policy and appropriate use of the account
    reconciliation monitoring tool;                                                                                                        

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| |   |                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Developed and improved processes to ensure adequate
    communication between commercial and accounting personnel to
    allow for complete and timely identification, communication and
    review of information required to record non-routine
    transactions; and
|
| |  | Established a more rigorous top-down review of the financial
    statements at the management, corporate and Disclosure Committee
    levels.                                                                                                                          





| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | Conducting further training on company-wide accounting policies;                         
|
| |  | Improving our procedures for managing information systems
    changes; and               
|
| |  | Enhancing 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




Coastal Eagle Point Air Issues.


Corpus Christi Refinery Air Violations.


Natural Buttes.





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




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Item 6. Exhibits




| |  |         |      |    |             |                                                                                                        
| |  | ------- | ---- | -- | ----------- | -------------------------------------------------------------------------------------------------------
| |  | Exhibit |      |    |            
| |  | Number  |      |    | Description
| |  |         |      |    |            
| |  |         | *31  | .A |             | Certification of Chief 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 Chief 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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##### Table of Contents






SIGNATURES






| |  |                    
| |  | -------------------
| |  | EL PASO CGP COMPANY



| |                              
| | -----------------------------
| | /s/ D. Mark Leland           
| |                              
| | D. Mark Leland               
| | Executive Vice President and 
| | Chief Financial Officer      
| | (Principal Financial Officer)



| |                                     
| | ------------------------------------
| | /s/ Jeffrey I. Beason               
| |                                     
| | Jeffrey I. Beason                   
| | Senior Vice President and Controller
| | (Principal Accounting Officer)      

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EXHIBIT INDEX




|        |      |    |             |                                                                                                        
|------- | ---- | -- | ----------- | -------------------------------------------------------------------------------------------------------
|Exhibit |      |    |            
|Number  |      |    | Description
|        |      |    |            
|        | *31  | .A |             | Certification of Chief 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 Chief 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.