press release

Texaco Press Release - Texaco Announces Gulf of Mexico Offshore LNG Terminal Study


HOUSTON, May 15 - Texaco announced today that it will soon complete a study for the development of a new Liquefied Natural Gas (LNG) Receiving and Regasification Terminal in the U.S. Gulf of Mexico. The study examines and evaluates infrastructure requirements and costs of the project.

The proposed Gulf of Mexico terminal would be constructed as an offshore facility and initially designed to process approximately one billion cubic feet per day (BCFD). This facility would connect to Texaco's extensive offshore infrastructure, which has under-utilized capacity as Gulf of Mexico natural gas production has declined. The company's offshore natural gas infrastructure is connected onshore to several interstate pipeline systems, as well as the Henry Hub, which is operated by a Texaco subsidiary. This facility could be operational in four to five years.

According to Robert A. Solberg, President of Texaco Commercial Development, "The U.S. demand for natural gas continues to increase at a significant pace, demonstrating the need for clean burning fuels for power generation, industrial fuels and residential markets. The traditional supply basins can be developed to meet this growing demand, and LNG creates an outstanding opportunity to construct new facilities that can deliver this much needed gas supply to U. S. markets."

The facility could ultimately be expanded up to two BCFD to meet further increases in natural gas demand from the U.S. market. The supply of LNG for the terminal would be produced from one or more potential projects in the Atlantic Basin in which Texaco holds an equity interest.

"We are enthusiastic about the prospects for growth of the natural gas business and this regasification effort is part of Texaco's larger natural gas strategy. Natural gas discovered in areas where there are no local markets is being considered for use as feedstock for projects such as this, targeting the U.S. market," said Solberg.

The four existing U.S. LNG receiving terminals are almost fully contracted, which creates the need for new import facilities that can deliver this important new energy supply into the U. S.

The study is being conducted over a six-month period and is expected to demonstrate that by creatively accessing and utilizing existing infrastructure in this area where traditional supplies are in decline, the project would have minimal environmental impact.

Note: This press release contains a number of forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In particular, statements made concerning Texaco's expected performance and financial results in future periods are based upon Texaco's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

The following factors known to Texaco among others, could cause Texaco's actual results to differ materially from those described in the forward-looking statements: inaccurate scientific data; mechanical, chemical and technological failures; decreased demand for fuels and other products; above or below-average product and technology demands; worldwide and industry economic conditions; higher costs, expenses and interest rates; the outcome of pending and future litigation and governmental proceedings; continued availability of financing; and strikes and other industrial disputes. In addition, you are encouraged to review Texaco's latest reports filed with the SEC, including, but not limited to, Texaco's Annual Report on Form 10-K filed with the SEC on March 26, 2001, which describes a number of additional risks and uncertainties that could cause actual results to vary materially from those listed in the forward-looking statements made in this press release.

Updated: May 2001