press release

Unocal Midstream & Trade drills natural gas storage test well at its Windy Hill facility in northeastern Colorado

Unocal Midstream & Trade drills natural gas storage test well at its Windy Hill facility in northeastern Colorado

Sugar Land, Texas, Oct. 7, 2004 - Unocal Midstream & Trade (UMT), a business unit of a wholly owned subsidiary of Unocal Corporation (NYSE: UCL), said today that it has started a program to assess the feasibility for developing a bedded salt natural gas storage facility at its Windy Hill property in Morgan County, Colorado.

Unocal Windy Hill Gas Storage, LLC, a wholly owned indirect subsidiary of Unocal Corporation, has commenced drilling a 6,500-foot test well to determine the feasibility of developing the first-ever bedded salt natural gas storage facility in Colorado.

The test well will obtain approximately 600 feet of core through the Permian salts at a depth of 6,000 feet to assess the thickness, quality, quantity and mechanical properties of the salt. The same well bore will be tested to determine the brine injection capacity of Cretaceous-age sandstones at depths of 5,100 to 5,700 feet.

"With the immediate demand for high deliverability storage services currently facing Denver markets and the Front Range, Unocal views this test well as a significant first step in developing the infrastructure to meet those needs," stated Joe Blount, president, Unocal Midstream & Trade.

Located near Brush in northeastern Colorado, the Windy Hill facility would be developed in three phases. Phase 1 would offer 3 billion cubic feet (Bcf) of working gas capacity with an injection rate of 100 million cubic feet per day (MMcf/d) and a withdrawal rate of 400 MMcf/d. Storage operations are expected to be in service by late 2007.

The proposed design of Windy Hill would ultimately provide up to 9 Bcf of high deliverability storage to shippers at the Cheyenne and Greensburg Hubs, as well as local Denver markets, via proposed initial pipeline connections with Cheyenne Plains, CIG and Xcel (Public Service Company). Future interconnects are proposed with Southern Star, AIG Ralston and K-M Intrastate.

Unocal plans to construct Windy Hill as an interstate facility and has initiated the permitting process and provided notification to the Federal Energy Regulatory Commission (FERC) regarding its testing activities pursuant to Docket No. CP04-367-000.

Once the test well is evaluated, Windy Hill Gas Storage would hold an open season to secure expressions of interest in storage capacity. The open season is planned for the first quarter of 2005.

For additional information about Windy Hill Gas Storage, please contact Steve Hanshaw at 281-287-5804 (

About Unocal Midstream & Trade

UMT, a business unit of a wholly owned subsidiary of Unocal Corporation (NYSE: UCL), manages Unocal's storage, pipeline and terminal assets, including interests in 67 Bcf of natural gas storage capacity, more than 8,000 miles of crude oil, natural gas and product pipelines, and 12 million barrels of crude oil and products storage. UMT also markets Unocal's worldwide natural gas, crude oil and condensate resources.

About Unocal Corporation

Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies with principal operations in North America and Asia.

This news release contains forward-looking statements about matters such as test well activities, construction and design plans, storage capabilities, Windy Hill's open season, pipeline interconnections and natural gas transportation. Although these statements are based upon Unocal's current expectations and beliefs, they are subject to known and unknown risks and uncertainties that could cause actual results and outcomes to differ materially from those described in, or implied by, the forward-looking statements, including fluctuations in demand for natural gas and natural gas prices, receipt of required regulatory approvals, operational and economic factors, performance by third party owners and operators of interconnected pipelines and other risks and uncertainties discussed in Unocal's 2003 Annual Report on Form 10-K, as amended, and other subsequent reports filed by Unocal with the U.S. Securities and Exchange Commission (SEC File No. 1-8483). Copies of Unocal's SEC filings are available from Unocal by calling 800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site. Unocal undertakes no obligation to update the forward-looking statements in this news release to reflect future events or circumstances. All such statements are expressly qualified by this cautionary statement.

Updated: October 2004