press release

Unocal proposes integrated energy project in Bangladesh; signs technical study agreement for Shahbazpur gas field

El Segundo, Calif., June 3, 1996 -- Unocal Corporation said today it has proposed a major integrated energy project to the government of Bangladesh that could initially involve development of natural gas resources and construction of a gas-fired electrical generating plant.

"As a first step, we signed an agreement for a joint technical study with Petrobangla to delineate the possible recoverable natural gas resources in the Shahbazpur field in southern Bangladesh on the Bay of Bengal," said John G. Vandermeer, president of Unocal Asia-Pacific Ventures, Ltd., Unocal's Singapore-based new business development unit in Asia. Petrobangla is the Bangladesh national oil company.

The proposal calls for a multi-phase integrated energy project. The first phase would include delineation and development of the Shahbazpur natural gas field to produce 30 million cubic feet per day, and construction of a 40-kilometer gas transmission line to Barisal and a 150-megawatt electrical generating plant. Estimated cost could be $250 million. This could be in operation in 1999 if technical, contractual and financial details are resolved satisfactorily.

"This is an exciting project that links a known natural gas resource with a ready and growing market," Vandermeer said. "From Barisal, the electricity from the proposed power plant can connect into the existing Bangladesh power grid."

Vandermeer noted that the power plant in the first phase could be expanded to 300 megawatts, depending upon the power sales agreement that would be negotiated.

"This proposed project meshes with our focused strategy in Asia," Vandermeer said. "It presents both resource production and value-added downstream opportunities."

Petrobangla discovered the Shahbazpur gas field in 1995. At that time, Petrobangla estimated that the field could contain about 400 billion cubic feet of recoverable gas. "Our joint technical study with Petrobangla over the coming months will give us a clearer picture of the recoverable gas in the field," Vandermeer said.

The second and third phases of the proposed project include a fertilizer plant and cement plant. These additional projects that utilize natural gas would be dependent upon the available gas resources and the results of further feasibility studies.

Updated: June 1996