CHEVRON, NGC FORM PARTNERSHIP TO OPERATE, EXPAND VENICE COMPLEX.

HOUSTON--(BUSINESS WIRE)--Oct. 25, 1996--Chevron U.S.A. Production Company, a division of Chevron U.S.A. Inc., and Warren Petroleum Company, Limited Partnership, a subsidiary of NGC Corporation, have signed a letter of intent to form a new partnership to own, operate and expand Chevron's Venice Complex. Located approximately 75 miles southeast of New Orleans, the Venice facilities include an offshore gas gathering system, a gas processing plant, a gas liquids fractionation facility, an underground gas liquids storage facility and a multi-barge gas liquids terminal.

Under the letter of intent, Warren will own approximately one-third of the partnership, will operate the facility and assume commercial responsibility for the partnership. Chevron will own approximately two-thirds of the partnership and continue to be one of the major producer suppliers to the Venice complex. Both companies are considering adding other partners.

As part of the letter of intent, the partnership will immediately add another gathering pipeline, expand onshore compression and condensate handling facilities and add a new cryogenic unit to expand the gas processing plant from 1.0 to 1.3 billion cubic feet per day. Subject to successful negotiation of a definitive partnership agreement, Chevron and NGC expect to close the joint venture by the end of the year.

David Dunn, vice president of Chevron's Midstream Business Unit, said, "This agreement begins another step in our phased development approach to enhance the competitiveness of the Venice complex and economically address the infrastructure needs spurred by producers' gas development in the Venice corridor."

Steve Furbacher, president of Warren and senior vice president of NGC, said, "This project is a key example of the benefits of the Chevron-NGC merger. Chevron's Venice facility is a premier gathering, processing and fractionation complex that is strategically located to provide gathering and processing services to producers in the Gulf of Mexico, including those with new deep water development projects. Now, with the expertise and skills that both companies bring, the Venice project will offer a broad range of services to customers in the area. NGC will bring its marketing, commercial and operating expertise to the partnership, while Chevron will dedicate gas production from various offshore areas to the venture for gathering and processing."

San Francisco-based Chevron Corporation is the sixth largest oil company (by revenue) in the world and is the largest marketer of refined products and the third largest producer of natural gas in the United States.

NGC Corporation (NYSE:NGL) is a leading gatherer, processor, transporter, and marketer of energy products and services in North America and the United Kingdom. Through its "Energy Store," NGC offers a multi-commodity energy-product-and-services resource that provides natural gas, natural gas liquids, electricity and crude oil.

CONTACT: NGC Corp., Houston

Katherine K. Putnam (Media), 713/507-3936 or

R. Dean Ayers (Analyst), 713/507-6852

or

Chevron Corp.

Glenn Weaver, 713/754-2280 or

Tom Garcia, 504/592-6432