Unocal's Keystone Natural Gas Storage Facility expands capacity
Sugar Land, Texas, June 25, 2004 - Unocal Midstream & Trade (UMT), a business unit of Unocal Corporation (NYSE: UCL), said today that a third natural gas storage cavern has been placed in service at its Keystone Gas Storage Facility and that mining operations for the fourth and fifth caverns continue. This added capacity brings Keystone's total active gas storage capacity to approximately 3 billion cubic feet (Bcf). Total capacity could reach 5 Bcf by early 2006.
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 pipeline systems.
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. "The combination of Keystone's increased working gas capacity and FERC approval for market-based rates positions Keystone to further serve customers and consumers in Texas as well as the Midwestern and Western interstate markets," said Joseph A. Blount, Jr., president of UMT.
"We are very pleased with the market response to the Keystone facility. We have sold out firm capacity in our first four caverns and are now talking with customers about a fifth cavern," said Jim Avioli, general manager for UMT's storage business. Keystone has applied for Texas Railroad Commission approval to add three more caverns (6, 7 and 8) to its facility, and mining of the sixth cavern could begin by the end of this year. Other expansion efforts include installation of a third compressor later this summer.
Keystone plans to hold an Open Season for the capacity of cavern 5, and the expected future expansion of caverns 6, 7 and 8. Please contact Jim Avioli at 281-287-5235 or Chris Hoekenga at 281-287-7512 for more information.
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 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: June 2004