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                           EL PASO ENERGY CORPORATION

                             STOCK OPTION PLAN FOR
                             NON-EMPLOYEE DIRECTORS





              AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1998
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                               TABLE OF CONTENTS

<TABLE>
<S>              <C>                                                                                                    <C>
SECTION 1        PURPOSE    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 2        SHARES SUBJECT TO THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 3        ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 4        PARTICIPATION IN THE PLAN  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

SECTION 5        OPTION GRANTS AND TERMS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

SECTION 6        GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

SECTION 7        EFFECTIVE DATE AND DURATION OF PLAN  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

SECTION 8        COMPLIANCE WITH SECTION 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

SECTION 9        AMENDMENT, TERMINATION OR DISCONTINUANCE OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>




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El Paso Energy Corporation                                     Table of Contents
Stock Option Plan for Non-Employees Directors                                   
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                           EL PASO ENERGY CORPORATION
                  STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
              AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 1, 1998

                             SECTION 1      PURPOSE

         The purpose of the E1 Paso Energy Corporation Stock Option Plan for
Non-Employee Directors, Amended and Restated Effective as of January 1, 1998
(the "Plan") is to attract and retain the services of experienced and
knowledgeable non-employee Directors of E1 Paso Natural Gas Company, doing
business as El Paso Energy Corporation (the "Company"), and to provide an
incentive for such Directors to increase their proprietary interests in the
Company's long-term success and progress.


                    SECTION 2    SHARES SUBJECT TO THE PLAN

         2.1     Subject to Section 2.2, the maximum number of shares of the
Company's common stock, $3 par value per share (the "Common Stock"), for which
options may be granted under the Plan is one hundred thousand (100,000) (the
"Shares").  The Shares shall be shares held in the Company's treasury or issued
out of the authorized but unissued shares of the Company, or partly out of
each, as shall be determined by the Plan Administrator.

         2.2     In the event of a recapitalization, stock split, stock
dividend, exchange of shares, merger, reorganization, change in corporate
structure or shares of the Company or similar event, the Board of Directors of
the Company (the "Board"), may make appropriate adjustments in the number of
shares authorized for the Plan and, with respect to outstanding options, the
Plan Administrator may make appropriate adjustments in the number of shares and
the option price.  In the event of any adjustment in the number of Shares
covered by any option, any fractional Shares resulting from such adjustment
shall be disregarded and each such option shall cover only the number of full
Shares resulting from such adjustment.

                     SECTION 3   ADMINISTRATION OF THE PLAN

         Unless otherwise determined by the Board and subject to Section 9, the
Plan shall be administered by a management committee (the "Plan Administrator")
consisting of the Chairman of the Board of the Company and such other senior
officers as the Chairman of the Board shall designate.  The Plan Administrator
shall interpret the Plan, shall prescribe, amend and rescind rules relating to
it from time to time as it deems proper and in the best interests of the
Company, and shall take any other action necessary for the administration of
the Plan.




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Stock Option Plan for Non-Employees Directors                                   
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                     SECTION 4   PARTICIPATION IN THE PLAN

         Each member of the Board elected or appointed who is not otherwise an
employee of the Company or any subsidiary corporation (a "Participant") shall
receive option grants as provided in the Plan.

                      SECTION 5    OPTION GRANTS AND TERMS

         Each option granted to a Participant under the Plan and the issuance
of Shares thereunder shall be subject to the following terms:

5.1      OPTION GRANTS

         A Participant shall automatically receive (a) a grant of stock options
to purchase three thousand (3,000) Shares when the Participant is initially
elected or appointed as a Director of the Company and (b) a grant of stock
options to purchase two thousand (2,000) Shares on each date the Participant is
reelected as a Director of the Company at the Annual Meeting of Stockholders of
the Company  (the "Annual Meeting"), beginning with the Annual Meeting in 1998.

         Each option granted under the Plan shall be evidenced by a written
instrument delivered by or on behalf of the Plan Administrator containing
terms, provisions and conditions not inconsistent with the Plan.

5.2      VESTING OF OPTIONS

         Each option granted to a Participant under the Plan shall be fully
vested and immediately exercisable upon grant.

5.3      OPTION PRICE

         The option price for an option granted under the Plan shall be the
fair market value of the Shares covered by the option at the time the option is
granted.  For purposes of the Plan, "fair market value" shall be the mean
between the highest and lowest quoted selling prices at which the Common Stock
was sold on such date as reported in the NYSE Composite Transactions by The
Wall Street Journal on such date or, if no Common Stock was traded on such
date, on the next preceding date on which Common Stock was so traded.

5.4      TIME AND MANNER OF EXERCISE OF OPTION

         Each option may be exercised in whole or in part at any time and from
time to time; provided, however, that no fewer than one hundred (100) Shares
(or the remaining Shares then purchasable under the option, if less than one
hundred (100) Shares) may be




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El Paso Energy Corporation                                              Page 2
Stock Option Plan for Non-Employees Directors                                   
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purchased upon exercise of any option hereunder and that only whole Shares will
be issued pursuant to the exercise of any option.

     The purchase price of shares purchased under options shall be paid in full
to the Company incident to the exercise of the option by delivery of
consideration equal to the product of the option price and the number of shares
purchased (the "Purchase Price").  Such consideration may be paid (i) in cash
or by check; (ii) in shares of Common Stock already owned by the Participant
for a sufficient time (generally six (6) months) to not result in an accounting
charge to the Company, or any combination of cash and Common Stock, with the
fair market value of such Common Stock valued as of the day prior to delivery;
or (iii) by delivery of a properly executed exercise notice, together with
irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale or loan proceeds to pay the Purchase Price.  The Plan
Administrator can specify that options granted or to be granted shall permit
additional techniques to pay the Purchase Price. A Participant shall have none
of the rights of a stockholder until the Shares of Common Stock are issued to
the Participant.

5.5      TERM OF OPTIONS

         Each option shall expire ten (10) years from the date of the granting
thereof, but shall be subject to earlier termination as follows:

         (a)     In the event that an optionee ceases to be a Director of the
                 Company for any reason other than the death of the optionee,
                 the options granted to such optionee shall expire unless
                 exercised by him or her within thirty-six (36) months after
                 the date such optionee ceases to be a Director of the Company.

         (b)     In the event of the death of an optionee, whether during the
                 optionee's service as a Director or during the thirty-six (36)
                 month period referred to in Section 5.5(a), the options
                 granted to such optionee shall be exercisable, and such
                 options shall expire unless exercised within twelve (12)
                 months after the date of the optionee's death, by the legal
                 representatives or the estate of such optionee, by any person
                 or persons whom the optionee shall have designated in writing
                 on forms prescribed by and filed with the Company or, if no
                 such designation has been made, by the person or persons to
                 whom the optionee's rights have passed by will or the laws of
                 descent and distribution.

5.6      TRANSFERABILITY

         During an optionee's lifetime, an option may be exercised only by the
optionee.  Options granted under the Plan and the rights and privileges
conferred thereby shall not be subject to execution, attachment or similar
process and may not be transferred, assigned,




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El Paso Energy Corporation                                              Page 3
Stock Option Plan for Non-Employees Directors                                   
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pledged or hypothecated in any manner (whether by operation of law or
otherwise) other than by will or the applicable laws of descent and
distribution except that, to the extent permitted by applicable law and the
Rules promulgated under Section 16(b) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the Plan Administrator may permit a recipient
of an option to designate in writing during the optionee's lifetime a
beneficiary to receive and exercise options in the event of the optionee's
death (as provided in Section 5.5(b)).  Any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of any option under the Plan or of any
right or privilege conferred thereby, contrary to the provisions of the Plan,
or the sale or levy or any attachment or similar process upon the rights and
privileges conferred thereby, shall be null and void.

5.7      DEFERRAL ELECTION

         A Participant may elect irrevocably at any time prior to exercising an
option granted under the Plan that issuance of Shares upon exercise of such
option shall be deferred until the Participant reaches a pre-specified age or
ceases to serve as a Director of the Company, as elected by the Participant.
After the exercise of any such option and prior to the issuance of any deferred
shares, the number of Shares issuable to the Participant shall be credited to a
memorandum deferred account and any dividends or other distributions paid on
the Common Stock shall be deemed reinvested in additional shares of Common
Stock until all credited Shares shall become issuable pursuant to the
Participant's election.

                        SECTION 6    GENERAL PROVISIONS

         6.1     Neither the Plan, nor the granting of an option, nor any other
action taken pursuant to the Plan shall constitute or be evidence of any
agreement or understanding, express or implied, that a Participant has a right
to continue as a Director for any period of time or at any particular rate of
compensation.

         6.2     The Company shall not be required to issue any certificate or
certificates for Shares upon the exercise of an option granted under the Plan,
or record as a holder of record of Shares the name of the individual exercising
an option under the Plan, (a) without obtaining to the complete satisfaction of
the Plan Administrator the approval of all regulatory bodies deemed necessary
by the Plan Administrator, and (b) without complying, to the Plan
Administrator's complete satisfaction, with all rules and regulations under
federal, state or local law deemed applicable by the Plan Administrator.

         6.3     All costs and expenses of the adoption and administration of
the Plan shall be borne by the Company.




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El Paso Energy Corporation                                              Page 4
Stock Option Plan for Non-Employees Directors                                   
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         6.4     The Plan shall be construed and governed in accordance with
the laws of the State of Texas, except that it shall be construed and governed
in accordance with applicable federal law in the event that such federal law
preempts state law.

         6.5     Appropriate provision shall be made for all taxes required to
be withheld in connection with the exercise or other taxable event with respect
to options under the applicable laws or regulations of any governmental
authority, whether federal, state or local and whether domestic or foreign.

         By participating in the Plan, each Participant shall agree that he or
she is responsible for obtaining qualified tax advice prior to the
Participant's (i) entering into any transaction under or with respect to the
Plan, (ii) designating or choosing the times of distributions under the Plan,
or (iii) disposing of any shares of Common Stock issued under the Plan.

              SECTION 7    EFFECTIVE DATE AND DURATION OF THE PLAN

         The original plan was dated as of January 1, 1992 and adopted by the
Company's Board and approved by the Company's sole stockholder on January 15,
1992.  The amendment and restatement of this Plan,  was adopted by Board on
December 2, 1997, effective as of January 1, 1998.  The Plan shall continue in
effect until it is terminated by action of the Board or the Company's
stockholders, but such termination shall not affect the then-outstanding terms
of any options or the Company's obligation to issue Shares under any
then-exercised options as to which a deferral election has been made under
Section 5.7

                     SECTION 8   COMPLIANCE WITH SECTION 16

         The Company's intention is that, so long as any of the Company's
equity securities are registered pursuant to Section 12(b) or 12(g) of the
Exchange Act, with respect to awards granted to or held by Section 16 Insiders,
the Plan shall comply in all respects with Rule 16b-3 or any successor rule or
rule of similar application under Section 16 of the Exchange Act or rules
thereunder, and, if any Plan provision is later found not to be in compliance
with such exemption under Section 16, that provision shall be deemed modified
as necessary to meet the requirements of such applicable exemption.

              SECTION 9   AMENDMENT, TERMINATION OR DISCONTINUANCE
                                  OF THE PLAN

         9.1     Subject to the Board and Section 9.2, the Plan Administrator
may from time to time make such amendments to the Plan as it may deem proper
and in the best interest of the Company, including, but not limited to, any
amendment necessary to ensure




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El Paso Energy Corporation                                              Page 5
Stock Option Plan for Non-Employees Directors                                   
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that the Company may obtain any regulatory approval referred to in Section 6.2;
provided, however, that unless the Plan Administrator determines that such
change does not materially impair the value of the options, no change in any
option theretofore granted may be made which would impair the right of the
Participant to acquire Shares or retain Shares that the Participant may have
acquired as a result of the Plan without the consent of the Participant.

         9.2     The Board may at any time suspend the operation of or
terminate the Plan with respect to any Shares which are not at that time
subject to any outstanding options.



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El Paso Energy Corporation                                              Page 6
Stock Option Plan for Non-Employees Directors                                   
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         IN WITNESS WHEREOF, the Company has caused the Plan to be executed
effective as of January 1, 1998.


                                          EL PASO ENERGY CORPORATION


                                          By [/s/ ILLEGIBLE]
                                            ---------------------------------
                                          Title: Executive Vice President


ATTEST:

By [/s/ ILLEGIBLE]
  ---------------------------------
Title: Corporate Secretary






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El Paso Energy Corporation                                              Page 7
Stock Option Plan for Non-Employees Directors