press release

Unocal unit constructs new Texas natural gas storage facility

Sugar Land, Texas, Jan. 17, 2001 -- Unocal Global Trade today said that construction on the first phase of the Keystone Gas Storage Project near Kermit, Texas, is proceeding on schedule.

Located near the Waha Hub, the Keystone project will initially have 3 billion cubic feet (bcf) of high deliverability salt cavern storage capacity, with sustainable 100 million cubic feet per day (mmcfd) injection and 200 mmcfd withdrawal capability. The facility is projected to begin storage operations in the first quarter 2002, coincident with the deregulation of electric power generation in Texas.

Given the volatility in today's gas market and the large number of merchant generation facilities currently under construction in Texas, fuel management will be critical for these facilities and existing utility generators to serve their customers.

"Additional, high deliverability salt cavern storage capacity will be required to provide the highly flexible, no-notice service requirements of these generators and to serve the operational load balancing requirements of the pipelines serving these facilities" said Joseph A. Blount, president of Unocal Global Trade. "The Keystone Gas Storage Facility is a critical addition to existing gas infrastructure in and around Waha, which currently lacks effective storage capacity to provide these services."

Blount added that the Keystone facility will provide much-needed storage capacity, market flexibility, and deliverability options to Texas utilities, merchant power generators, industrial consumers, Permian Basin producers and marketers.

Rex A. Bigler, director of Midstream Services for Unocal Global Trade, said that all of the wells, pump facilities, and infrastructure necessary to create the initial storage caverns are in place, and solution-mining operations are under way.

"Ultimately, we expect the Keystone Gas Storage Facility will have 5 bcf of salt cavern storage capacity and deliverability in excess of 300 mmcfd," Bigler said.

Unocal's North American Storage Assets

Unocal Corporation operates and owns 100 percent of the Keystone Gas Storage Project. In addition to Keystone, Unocal Canada Limited owns a 93.79-percent interest in the Aitken Creek Gas Storage facility, located on the Alliance pipeline route in British Columbia. Aitken Creek has 44 bcf of reservoir storage capacity and deliverability exceeding 400 mmcfd. Aitken Creek is currently undergoing expansion to 52 bcf of reservoir storage capacity and deliverability exceeding 500 mmcfd. Unocal Canada Alberta Hub Ltd. has a 30%-interest in The Alberta Hub natural gas storage facility located near Edson, Alberta, with 25 bcf of capacity and deliverability exceeding 400 mmcfd.

About Unocal Global Trade

Unocal Global Trade is the crude oil and natural gas commodity trading unit of Unocal Corporation. Global Trade also manages Unocal's pipeline, crude oil terminal and natural gas storage interests.

To learn more about Unocal Global Trade and its activities, visit the unit's web site. For information on the Keystone Gas Storage Project, contact Rex Bigler, 281-287-5513; or Jim Avioli, 281-287-5235.

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. The reports are also available on the Unocal web site.

Updated: January 2001