Unocal Submits Bibiyana Pipeline Development Plan

Unocal submitted a Pipeline Development Plan - Bangladesh Natural Gas Pipeline Project to Petrobangla, the state oil company of Bangladesh earlier this week. The Pipeline Development Plan is a follow up to the Market Feasibility and Commercialization Plan Unocal submitted to Petrobangla, as per its Production Sharing Contract (PSC) on Nov. 6, 2000, in order to develop the Bibiyana gas field which Unocal and it subsidiaries discovered in 1998. The Market Feasibility and Commercialization Plan included a comprehensive review of LNG and other options available for commercialization of Bibiyana field and concluded that an export pipeline to markets in India results in the highest value for Bibiyana gas for Bangladesh. The Pipeline Development Plan proposal includes construction of a new 30-inch diameter, 1,363-kilometer (847-mile) pipeline, with an initial capacity of 500 million cubic feet of gas per day (Mmcfd), from the Bibiyana field in northeast Bangladesh to the Delhi market area in India.

It is anticipated that this project will enable Unocal to commercialize natural gas from the Bibiyana field and provide significant benefits to Bangladesh including:

• Highest value for Bangladesh's gas
• Estimated US $3.7 billion in total revenues to the Government of Bangladesh over 20-year project life
• US$500 to US$700 million in immediate foreign direct investment
• Promote additional oil and gas exploration
• Expand domestic gas pipeline infrastructure
• Additional foreign exchange, balance of trade and social benefits
• Construction and operations jobs

Unocal's export proposal is based on sound market, technical and economic studies and it is believed that gas exports can play a significant role in helping Bangladesh to achieve its economic, social and energy goals and would promote countrywide exploration activities.