Unocal unit leases capacity at Keystone Gas Storage Facility to e prime
Sugar Land, Texas, Feb. 4, 2002 - Unocal Midstream & Trade and e prime announced today that e prime has signed a long-term gas storage lease at Unocal's Keystone Gas Storage Facility, located near Kermit, Texas.
The storage facility is owned and operated by Unocal Keystone Gas Storage LLC, a subsidiary of Unocal Corporation (NYSE: UCL). e prime is an unregulated subsidiary of Xcel Energy Inc. (NYSE: XEL).
The lease provides e prime with 1.5 billion cubic feet (BCF) of high deliverability salt cavern storage capacity, with the term tied to future cavern development that extends through 2007.
The Keystone Gas Storage Facility, currently under construction, is expected to commence storage operations this summer. The lease with e prime encompasses 50 percent of Unocal's planned Phase I capacity development of 3 BCF and 30 percent of the facility's expected ultimate capacity of 5 BCF.
"The physical capabilities of the Keystone facility fit well with e prime's customer requirements on the El Paso Natural Gas and Northern Natural Gas pipeline systems in Texas", said James L. Haupt, vice president of E prime. "Keystone provides the multiple-turn capability and service flexibility we need to serve our Texas power generation customers."
Joseph A. Blount, president of Unocal Midstream & Trade, said, "Given the volatility in today's gas market, deregulation of power generation in Texas, and the amount of incremental gas-fired generation capacity added over the past few years, generation fuel management will be critical to assure economic dispatch. Keystone provides the highly flexible, no-notice service requirements for these generators and the operational load balancing requirements of the pipelines serving them."
Blount noted that the Keystone facility is a much-needed addition to Permian Basin gas infrastructure, which currently lacks sufficient storage capacity to provide these services.
Unocal Keystone Gas Storage, LLC, owns and operates the Keystone facility, which provides intrastate storage services in Texas. It is targeted to provide 5 BCF of high deliverability storage capacity, with 167 million cubic feet per day (MMCFD) of injection capability and deliverability in excess of 300 MMCFD.
About UMT and Unocal Corporation
Unocal Midstream & Trade (UMT) is Unocal's midstream asset management and energy marketing business unit. In addition to Keystone, UMT manages the operations of the Aitken Creek Gas Storage Reservoir in British Columbia, which is connected with the Westcoast Transmission System and the Alliance Pipeline. Aitken Creek has 44 BCF of reservoir storage capacity and a deliverability exceeding 400 MMCFD. UMT also manages a 30-percent non-operated interest in the Alberta Hub, a 25 BCF natural gas storage facility located near Edson, Alberta.
Unocal Corporation is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principal oil and gas operations are located in North America (Gulf of Mexico region, Permian Basin, Alaska and Canada) and in Asia (Thailand, Myanmar, Indonesia, Bangladesh and Azerbaijan). The company is also pursuing exploration programs in Brazil and West Africa. Unocal is also one of the world's largest producers of geothermal energy with operations in the Philippines and Indonesia.
e prime marketing is an active participant in the major trading regions across the US. e prime provides a variety of services to many of the top IPP operators, producers, and end-use customers. e prime currently markets in excess of 4.5 BCF/d.
This news release contains certain forward-looking statements about future business operations. 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 2000 Form 10-K and subsequent reports filed with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.
Investors are urged to consider closely the disclosure in Unocal's 2000 Form 10-K and other reports (SEC File No. 1-8483). Copies of the company's SEC filings are available from the company by calling 800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site.
Updated: February 2002