press release

Texaco Press Release - Texaco to Develop Reformer for Reliant Energy Power Systems Fuel Cell

FOR RELEASE: THURSDAY, MAY 24, 2001

HOUSTON, May 24 - Texaco Energy Systems Inc. (TESI) announced today the signing of a joint development agreement for TESI to tailor its existing fuel processing technology for Reliant Energy Power Systems' (REPS) proton-exchange-membrane (PEM) fuel cell system being developed for residential use.

Fuel cells are self-contained, power generation devices capable of producing reliable electricity for residential, commercial, industrial and transportation applications. REPS' PEM fuel cell prototype is a 7.5 kilowatt unit that extracts hydrogen from natural gas using TESI's fuel reformer, and through a chemical process, creates electricity.

This technology can deliver personal power to homes and businesses even during peak demand periods. For residential applications, homeowners would have the option of disconnecting from their electric utility by using this device to power their homes using natural gas as the primary feed source.

"This project is aimed at producing a cost-effective, highly efficient fuel reformer that is commercial and meets specific cost and performance standards," said Greg A. Romney, vice president of Fuel Cells and Fuel Processing for TESI. "We were attracted to Reliant because of its substantial market presence and knowledge, and by the fuel cell's commercial, cost-effective design. And, Reliant chose us because of our expertise in fuel processing, our technology and commitment to produce a high quality product at a competitive price."

Dick Snyder, President & Chief Operating Officer of REPS, said, "We were looking for a proven fuel processor provider tuned into the customer safety, cost and reliability needs of the residential market. We share two goals: to accelerate the path to market and provide customers with environmentally smart, advanced energy solutions in step with the evolving marketplace."

Fuel cells require hydrogen to operate, and initially, the hydrogen supply will come from hydrogen-rich hydrocarbon fuels, which are already widely available. However, these hydrocarbon fuels must first be processed, or reformed, to release the hydrogen they contain.

TESI is developing a proprietary multi-fuel processor capable of converting commonly available fuels - such as natural gas and liquefied petroleum gases - into hydrogen, the necessary fuel for fuel cells. While the initial development is targeted at serving Reliant's fuel cell needs, the reformer is adaptable to other fuel cell systems.

REPS' and TESI's goal is to further the development and integration of their prototype units which includes plans to combine both technologies for testing in homes.

Reliant Energy Power Systems, a unit of Reliant Energy (NYSE: REI) based in Houston, Texas, was formed to bring Reliant Energy's PEM fuel cell technology to the marketplace.

Texaco Energy Systems Inc. (TESI), a wholly-owned subsidiary of Texaco Inc., was formed in 1999 to develop and commercialize a number of advanced energy technologies that represent new market opportunities, including fuel cells, fuel processing, hydrogen storage, and methods of converting liquid and gaseous hydrocarbons into clean liquid fuels.

Note: This press release may contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on certain assumptions which Texaco, as of the date of this release, believes to be reasonable and appropriate. Texaco cautions, however, that the actual facts and conditions that may exist in the future could vary materially from the assumed facts and conditions upon which such forward-looking statements are based.

Updated: May 2001