Unocal increases stake in natural gas storage with commissioning of new facility
Sugar Land, Texas, Sept. 17, 2002 - Unocal Keystone Gas Storage, LLC, today said that the first two gas storage caverns at the Keystone Gas Storage Project near Kermit, Texas, are now operating, giving the facility 2 billion cubic feet (bcf) of high deliverability salt cavern gas storage capacity. Keystone is a subsidiary of Unocal Corporation (NYSE: UCL).
The Keystone project has the capacity to inject 100 million cubic feet of natural gas per day (mmcfd) and withdraw 200 mmcfd. The facility connects by pipeline with natural gas systems operated by El Paso Natural Gas Company and Northern Natural Gas. The facility began operation with its first injections late last month.
Located in the Permian Basin supply area near the Waha Hub, Keystone is expected to ultimately provide 5 bcf of high deliverability gas storage capacity. The facility is designed to meet the intra-day, multiple-turn storage service requirements of power generators and the pipeline companies, producers, and marketers serving them.
"The completion of the first two caverns and commencement of gas injection at Keystone marks a major milestone in the development of this facility," said Joseph Blount, president of Unocal Keystone. "This facility provides the high deliverability storage services that have been historically lacking in the existing infrastructure in this area."
In response to strong customer demand, Unocal has already initiated development of the next 2 bcf of storage capacity at Keystone and expects to have the facility built out to its targeted capacity of 5 bcf by the third quarter 2005.
Keystone is licensed to provide intrastate storage services to the Texas market. Keystone has applied to FERC for permission to provide storage services to the interstate market. The company anticipates FERC approval before the end of the year.
Unocal North America storage portfolio
Including Keystone, Unocal has interests in North America storage facilities with a gross capacity of more than 70 bcf and a deliverability of 1 bcf per day. These facilities offer services to assist natural gas suppliers in controlling demand and price swings.
Unocal Canada Limited owns a 94-percent interest in the Aitken Creek Gas Storage facility in British Columbia. Aitken Creek is connected to both the Alliance and Duke Energy (Westcoast) pipeline systems. The facility was expanded in 2001 to 44 bcf of reservoir storage capacity and deliverability exceeding 400 mmcfd.
Unocal Canada Alberta Hub, Ltd., has a 30 percent-interest in the Alberta Hub natural gas storage facility located near Edson, Alberta. The Alberta Hub facility has 25 bcf of capacity and deliverability exceeding 400 mmcfd. The facility is connected to the TCPL Alberta (Nova) pipeline system.
About Unocal Midstream and Trade
Unocal Midstream and Trade (UMT) manages Unocal's natural gas storage interests as well as its pipeline and crude oil terminal assets. In addition, UMT markets most of Unocal's worldwide crude oil and natural gas production.
To learn more about UMT and its activities, visit Unocal's web site at www.unocal.com/umt. For information on the Keystone Gas Storage Facility, contact Jim Avioli, 281-287-5235, or Anne Fiedler, 281-287-5243.
This news release contains certain forward-looking statements about Unocal's construction plans and expected facility operational expansion. These statements are not guarantees of future performance. The statements are based upon Unocal'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. Actual results could differ materially as a result of factors discussed in Unocal's 1999 Form 10-K and subsequent reports filed with the Securities and Exchange Commission. Copies of the company's SEC filings are available from the company by calling 800-252-2233.
Updated: September 2002