press release

International consortium selected for LNG project in India

Sugar Land, Tex., Dec. 28, 1998 - An international consortium has been selected as the winning bidder for a power plant and liquefied natural gas (LNG) terminal project in Ennore, Tamil Nadu, India.

The international consortium includes CMS Energy Corporation, 20.75 percent; Grasim Industries Ltd. (of the Birla Group of India), 20.75 percent; Siemens Project Ventures of Germany, 20.75 percent; Unocal Bharat Limited, a subsidiary of U.S.-based Unocal Corporation, 17 percent; and Woodside Petroleum of Australia, 20.75 percent.

Under the terms of the bid, the consortium will develop, build, own and operate an 1,886-megawatt power plant and a 2.5-million-ton-per-year LNG receiving, regasification and storage facility. The power plant and LNG facility will be project financed. Total cost is estimated at US$1.6 billion. Financial closure is expected to be completed by year-end 2000.

The consortium submitted the lowest tariff-based bid and was selected by the Tamil Nadu Industrial Development Corporation (TIDCO), a state governmental body acting on behalf of the government of Tamil Nadu in southern India, to develop the proposed project. The consortium's bid was chosen over pre-qualified bids submitted by three other international consortia.

"The TIDCO project is a significant component of Unocal's gas marketing effort in India and is an opportunity for Tamil Nadu to utilize clean, competitively-priced natural gas to fuel industrial and economic growth," said Boyd Montgomery, Unocal New Ventures vice president. "We expect the LNG project to be the first step in what Unocal hopes will be an extension of the pipeline network throughout Tamil Nadu to facilitate this growth."

The LNG terminal at Ennore Port would have a capacity of 2.5 million metric tons per year. LNG unloading, regasification and storage operations will be conducted at the terminal. A memorandum of understanding with the Ras Laffan Liquefied Natural Gas Company (RasGas) of Qatar to supply the LNG requirement for the project has been executed. Natural gas from the terminal will fuel the power project, which will sell all of its electricity to the Tamil Nadu State Electricity Board under a 20-year contract.

Unocal is a leading global energy resource and project development company, with major oil and gas exploration and production activities in Asia, the U.S. Gulf of Mexico and Latin America.

Forward-looking statements, including projections of future business arrangements and financial arrangments in this news release are based on assumptions concerning market, competitive, regulatory, and other considerations. Actual results could differ materially.

Updated: December 1998