Unocal Set to Expand Natural Gas Storage Capacity in Texas

---

Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Unocal Keystone Gas Storage LLC (Sugar Land, Texas), a subsidiary of Unocal Corporation (NYSE:UCL) (El Segundo, California) is planning to further expand its Keystone Gas Storage facility (Plant 1059570) located near Kermit, Texas. The natural gas storage capacity of Keystone will increase from its present 2 Bcf capacity to 5 Bcf when the planned greater than $15 million expansion is completed in late 2005 (PEC 01009225). Unocal expects to begin solution mining on salt cavern 3 in late April and begin on caverns 4 and 5 in June of 2004. Construction of surface facilities will begin in August of the same year. Surface facilities will include the installation of a third 3,350 horsepower Caterpillar 3612 internal combustion engine compressor set and construction of two new injection and withdrawal wells. The FERC issued a news release approving Unocal Keystone's market-based rates in late January 2004. When completed, the expansion will increase storage services Unocal Keystone offers to the El Paso, Transwestern, and Northern Natural pipeline systems servicing the Texas, Southwest, and California markets.

There is early discussion of a further phase of expansion, which would entail the solution mining of caverns 6, 7, and 8 adding a further 3 Bcf of storage capacity supported by a fourth compressor unit and new dehydration capacity (PEC 01009757). Construction on these phases would not begin before late 2005, or early 2006.