press release

Unocal, Delta Sign MOU with Gazprom and Turkmenrusgaz for natural gas pipeline project

El Segundo, Calif., Aug. 13, 1996 -- Unocal Corporation (NYSE: UCL) and Delta Oil Company of Saudi Arabia said today they had signed a memorandum of understanding with Russia's Gazprom and Turkmenistan's Turkmenrusgaz as important additions to the consortium that plans to build a natural gas pipeline from Turkmenistan to Pakistan via Afghanistan.

The government of Turkmenistan also signed the memorandum at ceremonies held in Moscow.

The proposed pipeline would stretch nearly 900 miles from Turkmenistan's Dauletabad field, across Afghanistan, to central Pakistan with an expected throughput of up to 2.0 billion cubic feet (bcf) of gas per day. Cost is estimated at about $2 billion.

The four companies will now proceed to negotiate a definitive agreement defining the rights and obligations of the consortium members. Gazprom will have a 10 percent interest in the consortium, while Turkmenrusgaz will have 5 percent. Unocal and Delta hold the remaining 85 percent.

"This is a long-term, complex project that offers significant potential benefits to all of the parties," said Roger C. Beach, Unocal chairman and chief executive officer. "Because of the complexities of the project, we will be inviting other parties to join the consortium."

Joining Beach in signing the MOU were President Saparmurat Niyazov of Turkmenistan; Badr Al-Aiban, president of Delta; Mukhamed Orazov, chairman of Turkmenrusgaz; and Rem Vyakhirev, chairman of Gazprom.

Unocal had signed an agreement with the government of Turkmenistan in October 1995 giving Unocal the right to buy natural gas from specific, certified and dedicated reserves in Turkmenistan, transport it to Pakistan, and market it. The gas project would encompass construction of a pipeline from Turkmenistan through Afghanistan to Pakistan and development of marketing outlets in Pakistan.

Unocal also had signed an agreement last year with Turkmenistan to develop an oil pipeline from Turkmenistan through Afghanistan to a crude oil export terminal and/or refineries in Pakistan on the Indian Ocean. This pipeline would transport crude oil from fields inside Turkmenistan and from the surrounding region.

Unocal and Delta are both members of another consortium in Azerbaijan that is developing three giant oil fields offshore Baku in the Caspian Sea. The consortium expects to export more than 200,000 barrels per day from the "early oil" production program through two proposed pipeline routes from Baku to the Black Sea. The first pipeline should begin operation in late-1997

Updated: August 1996