press release

Unocal's Keystone facility holds open season for additional natural gas storage capacity

Sugar Land, Texas, July 20, 2004 - Unocal Midstream & Trade (UMT), a business unit of Unocal (NYSE: UCL), announced that its Keystone facility in West Texas is conducting a non-binding open season for future natural gas storage capacity that will continue through Sept. 1, 2004.

As part of its plan to expand storage capacity, Keystone is holding this open season to secure expressions of interest in firm gas storage services for 1 billion cubic feet (Bcf) of capacity from a fifth cavern that is currently being mined and anticipated to be in service by early 2006. Additionally, it is seeking expressions of interest for firm gas storage services from three proposed caverns (6, 7 and 8), which also would offer 1 Bcf of capacity each. Keystone has applied to the Texas Railroad Commission for permits to develop these three caverns.

Located in the Permian Basin near the Waha Hub, Keystone is a high-deliverability salt cavern natural gas storage facility. Regulated by the Railroad Commission of Texas as an intrastate facility, Keystone connects to the El Paso Natural Gas, Transwestern Gas Company and Northern Natural Gas Company pipelines. In January, Keystone requested and received approval from the Federal Energy Regulatory Commission (FERC) to provide gas storage services for interstate customers for up to 5 Bcf of gas at market-based rates. FERC approval and Keystone's pipeline connections allow it to serve customers in Texas as well as the Midwestern and Western interstate markets.

"We continue to be pleased with the market response to the Keystone facility. We have sold out firm capacity in our first four caverns. The results of this open season will help us size the market demand for additional capacity and allow us to build sufficient caverns at Keystone to meet those needs," states Jim Avioli, general manager for UMT Storage.

Keystone has been in service since September 2002. At its current capacity of 3 Bcf, Keystone's deliverability capacity is 200 million cubic feet per day (MMcf/d) and its injection capacity is 100 MMcf/d. Upon the expected completion of the facility's fourth cavern in late 2004, Keystone would have a total of 4 Bcf of capacity in service.

Interested parties wanting to learn more about Keystone's open season process or to obtain an information package should contact Chris Hoekenga at 281-287-7512 ( or Anne Fiedler at 281-287-5243 (

About Unocal Midstream & Trade

Unocal Midstream & Trade, Unocal Corporation's midstream asset management and energy marketing business unit, manages facilities with approximately 65 Bcf of natural gas storage capacity and has interests in more than 8,000 miles of crude oil, natural gas and products pipeline facilities, as well as facilities with 12 million barrels of crude oil and products storage. In addition to Keystone, UMT, through its Unocal Canada Limited subsidiary, operates and owns a 93-percent working interest in the Aitken Creek Gas Storage Reservoir, a 48-Bcf facility located in northeastern British Columbia. It also owns a 43-percent working interest in the Alberta Hub, a 37-Bcf natural gas storage facility located near Edson, Alberta.

About Unocal Corporation

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

This news release contains forward-looking statements about matters such as Keystone's open season, mining operations, expansion plans, demand for gas storage services, storage capabilities, pipeline interconnections and natural gas transportation. Although these statements are based upon Unocal's current expectations and beliefs, they are subject to both 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, 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, (SEC File No. 1-8483) and other subsequent reports filed by Unocal with the U.S. Securities and Exchange Commission. Unocal undertakes no obligation to update the forward-looking statements in this news release to reflect future events or circumstances.

Updated: July 2004