press release

Unocal agrees to sell interest in Alliance Pipeline Project

El Segundo, Calif., Dec. 17, 1998 - Unocal Corporation today said it had signed a letter agreement to sell its 9.078-percent interest in the Alliance Pipeline Project to Vancouver-based Westcoast Energy Inc. for approximately US$50 million in cash.

"In the current commodity price environment, we need to channel the bulk of Unocal's available cash flow and capital dollars into our core oil and gas exploration and development projects," said Roger C. Beach, Unocal chairman and chief executive officer. "With this sale, we will be able to apply the proceeds to our high-potential growth opportunities, while avoiding about $30 million in capital expenditures associated with development of the project in 1999."

The sale is scheduled to close by the end of December, subject to completion of formal agreements. Unocal anticipates posting a gain in the fourth quarter from the transaction. The sale is subject to approval by the project participants and lenders and applicable governmental agencies.

The Unocal interest in the Alliance Pipeline Project is held by various Unocal U.S. and Canadian subsidiaries.

The Alliance Pipeline Project includes a planned 1,900-mile (3,100-kilometer) pipeline designed to transport more than 1.3 billion cubic feet of gas per day from British Columbia and Alberta to the Chicago-area market for processing and distribution throughout North America. The pipeline is scheduled begin service in late 2000.

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

Updated: December 1998