1. March 21, 2005Page 1 Globalization of the Asian Gas Market APEC LNG Workshop Chinese Taipei March 21-23, 2005

2. March 21, 2005Page 2 Asia Pacific Gas Demand Source : Facts

3. March 21, 2005Page 3 Asia Pacific Gas Demand 0 2000 4000 6000 8000 10000 12000 14000 Japan Indonesia ChinaMalay Aus India Pak Korea Thai Bang Taiwan NZ S'Pore Phili HK Bru Myan Viet MMCFD 2003 2015 Emerging Markets With Regional Influence Source : Facts

4. March 21, 2005Page 4 Asia Pacific Gas Imports 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 Japan Indonesia ChinaMalay Aus India Pak Korea Thai Bang Taiwan NZ S'Pore Phili HK Bru Myan Viet MMCFD 2003 2015 Emerging Markets With Regional Influence Source : Facts

5. March 21, 2005Page 5 Global Connectivity: LNG Imports Global LNG Demand mtpa Full History & Projection Asian Market Share - % of Global Demand 40% 50% 60% 70% 80% Past LNG –“Asia’s Exclusive” – Future LNG – Global Market Linking In the past, Asia’s LNG imports amounted to as high as 80% of world LNG trade and was disconnected from Europe & US gas markets. With increase in US & EU LNG imports, there will be greater influence from linkage with global trade. 0 50 100 150 200 250 300 350 400 1970 197219741976197819801982198419861988199019921994 19961998 2000 200220042006 200820102012 2014 201620182020 Europe/USA Asia

6. March 21, 2005Page 6 Global LNG Exports mtpa Full History & A Scenario Projection 0% 20% 40% 60% 80% Past LNG – “Asia’s Exclusive” – Future LNG – Global Market Linking Asia-Pacific Middle East Asia-Pacific vs Middle East LNG Exports Share - % of Global LNG Such linkage is further reinforced along the supply side with greater expansion of Middle East LNG into the Atlantic Basin supplying EU/USA as well as Asia Pacific markets. Global Connectivity: LNG Exports

7. March 21, 2005Page 7 Market Fundamentals Growth – strong fundamentals with developing economies -Strong demand continues for natural gas in Asian markets -Large emerging regional markets in China and India -Large Markets of US and EU still growing due to declining & expensive domestic options Connectivity – linkage of global & regional markets -Growth in US & Europe LNG imports from the Middle East increasing -Asia Pacific markets linkage to the US West Coast projected -North Asia Customers diversifying as new green-field plants are developed – Reliability is paramount! Asian Gas

8. March 21, 2005Page 8 Asia Power: Gas vs Coal While gas is the preferred environmental fuel, coal will continue to dominate and gas will have to compete more against coal in emerging markets. Though Coal will face more opposition. Nuclear will also face more political constraints and limits the amount of coal that could be mitigated by nuclear.

9. March 21, 2005Page 9 Gas-Fired GTCC Beats Alternatives (Gas Prices @ $3.00 - $5.00/MMBtu) POWER GENERATION COST @ 80% CAPACITY FACTOR

10. March 21, 2005Page 10 Indigenous Piped NG (PNG) > Imported PNG > Imported LNG > Imported Coal > Oil -Economics – Efficiency - Environmental -Income for the country from taxes and royalties. -Support of the building of infrastructure. -Security of supply. -Job creation across the upstream value chain Fuel Priorities

11. March 21, 2005Page 11 Asia-Pacific LNG Existing & projects targeting Asia-Pacific Potential Existing Under Construction Contracted Targeted Probable Possible By 2008 Base Demand exceeds currently contracted supply capacity! Capacity Asia-Pacific LNG Demand Forecast 0 40 80 120 160 200 240 199720002003200620092012 2015 2018 mtpa LowBaseHigh

12. March 21, 2005Page 12 Recent LNG Pricing Trends Indications are that current high oil & coal prices and outlook for US LNG imports are already exerting some influence …. “Market”

13. March 21, 2005Page 13 Lake Charles Terminal & Trunkline Receipt Point

14. March 21, 2005Page 14 Lake Charles Terminal ($/mmBtu) Jan - 05Feb - 05March – 05 Henry Hub Forward @ 11/30/20047.627.727.56 HH & Trunkline Basis differential- 0.06 Trunkline@ 10/29/2004 @ Receipt points 7.567.667.5 Terminal Cost & Send Out0.42 Ex-Ship Price7.147.247.08 Shipping Cost - Qatar to GoM (9696 Nm)-Poten & Partner 1.54 - Malaysia to GoM (12151 Nm)- Shipping model 1.87 FOB Price - Qatar5.605.705.54 - Malaysia5.275.375.21

15. March 21, 2005Page 15 Lake Charles Terminal ($/mmBtu) Apr - 05May - 05June – 05 Henry Hub Forward @ 12/31/20046.066.096.13 HH & Trunkline Basis differential- 0.05 Trunkline @ Receipt points6.016.046.08 Terminal Cost & Send Out0.42 Ex-Ship Price5.595.625.66 Shipping Cost - Qatar to GoM (9696 Nm)-Poten & Partner 1.54 - Malaysia to GoM (12151 Nm)- Shipping model 1.87 FOB Price - Qatar4.054.084.12 - Malaysia3.723.753.79

16. March 21, 2005Page 16 Zeebrugge Terminal ($/mmBtu) Jan - 05Feb - 05March – 05 IPE Closing Price @ 11/30/2004*7.677.536.18 Average Zeebrugge – NBP Basis Differential (10/1-12/7/2004)**- 0.92 Zeebrugge LNG Terminal Outlet point6.756.615.26 Terminal Cost & Send Out0.42 Ex-Ship Price6.336.194.84 Shipping Cost - Qatar to Zeebrugge (6606 Nm)-Shipping model1.08 - Malaysia to Zeebrugge (9169 Nm)- Shipping model1.21 FOB Price - Qatar5.255.113.76 - Malaysia5.124.983.63 *IPE futures prices are based on UK-National Balancing Point (NBP) ** Negative sign indicates Zeebrugge price< NBP price & vice versa

17. March 21, 2005Page 17 Zeebrugge Terminal ($/mmBtu) Apr - 05May - 05June – 05 IPE Closing Price @ 12/31/2004*5.184.864.72 Average Zeebrugge – NBP Basis Differential (10/1- 12/31/2004)** - 0.84 Zeebrugge LNG Terminal Outlet point4.344.023.88 Terminal Cost & Send Out0.42 Ex-Ship Price3.923.603.46 Shipping Cost - Qatar to Zeebrugge (6606 Nm)-Shipping model1.08 - Malaysia to Zeebrugge (9169 Nm)- Shipping model1.21 FOB Price - Qatar2.842.522.38 - Malaysia2.712.392.25 *IPE futures prices are based on UK-National Balancing Point (NBP) ** Negative sign indicates Zeebrugge price< NBP price & vice versa

18. March 21, 2005Page 18  Strong demand continues to hold energy prices in new band $40+/bbl oil / $6.00+/mmbtu gas / $60+ ton coal  New green-field LNG plants not keeping up with demand projections in the short-term  Market access to North America and Europe allows LNG to flow to highest value market – Spot Markets are emerging  LNG Prices begin to be set by Global Indices e.g. Henry Hub  Volatility in the markets will allow trading opportunities for those with receiving terminals Asian LNG Price Conclusions

19. March 21, 2005Page 19 5 64 3 2 1 Dock-1 Dock-2 Dock-3 H G F E A D B C LPG Tanks Year Capacity On-Line MM MT/Yr. TRAINS A/B 1977 5.377 TRAINS C 1983 5.377 TRAIN E 1989 2.875 TRAIN F 1993 2.912 TRAIN G 1997 2.912 TRAIN H 1999 3.136 22.589 With 8 trains running, the capacity of the plant has reached 22.59 MT/year LNG, 1 MT/year LPG and 10 Mbbl/year condensates. Bontang LNG Plant

20. March 21, 2005Page 20 Unocal Indonesia Gas Developments Bontang Unocal Development Plans West Seno - Operational Greater Gendalo – 2008/9 Greater Gehem – 2011/12 West Seno Hub Capacity = 100 MMSCFD Greater Gehem Hub Capacity = 300 – 500 MMSCFD Greater Gendalo Hub Capacity = 550-650 MMSCFD New Unocal supply of ~1 BCFD refills Bontang LNG Plant

21. March 21, 2005Page 21 Unocal’s Vision and Values