A group consisting of five independent exploration and production companies has approved a $665-million development plan for a production hub and pipeline to service at least six natural gas discoveries in an extremely deep and remote area of the eastern Gulf of Mexico.
The so-called Independence Hub, which will be designed to process up to 850 million cubic feet of gas per day, is to be located on Mississippi Canyon block 920 in 8,000 feet of water. The hub will take production from fields in Atwater Valley, DeSoto Canyon and Lloyd Ridge, where water depths range from 7,800 to 9,000 feet.
At one point, the Atwater Valley Producers Group had considered as many as 48 separate development options for the region, and disagreed whether the hub should be located in the northern or southern portion of the development area, or possibly in the middle.
“This location was selected for the permanently anchored host facility based on favorable seafloor conditions and proximity to the anchor fields,” the producers groups said of the final site selection.
First production is expected in 2007.
Platform will be owned by Enterprise, operated by Anadarko
Enterprise Products Partners, a leading provider of midstream energy services, was selected by the producers group to design, construct and install the hub, a 105-foot deep draft, semi-submersible platform with a two-level production deck.
The platform, estimated to cost $385 million, will be owned by Enterprise and operated by Anadarko Petroleum, one of the independents that make up the producers group. Other members are Kerr-McGee, Devon Energy, Dominion Exploration & Production and Spinnaker Exploration.
Anchor fields that will feed the hub are Atlas, Atlas NW, Jubilee, Merganser, Vortex, San Jacinto and Spiderman. However, the hub will be designed to handle production from up to 10 additional fields, the producers group said.
Enterprise also will own, install and operate 140 miles of 24-inch pipeline named Independence Trail. The pipeline, estimated to cost $280 million, is to deliver production from Independence Hub into the Tennessee Gas Pipeline on West Delta block 68.
Enterprise already has awarded key contracts for both the hub and pipeline. Contracts went to Atlantia Offshore for hull and mooring systems design, fabrication, construction and dry transportation to the staging site at Ingleside, Texas; Heerema Marine Contractors for hull and mooring systems transport and installation; Alliance Engineering for topsides engineering; Kiewit Offshore Services for topsides fabrication and installation onto the hull; and Allseas USA for installation of the gas pipeline.
Fields didn’t justify standalone
The producers group concluded early on that none of the anchor fields to be included in the hub project is large enough to justify its own standalone production facility.
Anadarko discovered the Atlas field in June 2003 when it encountered 180 feet of gross pay in nearly 9,000 feet of water. A satellite discovery, Atlas NW, followed in January 2004. The fields, on Lloyd Ridge blocks 5, 49 and 50, are 100 percent owned by Anadarko.
Jubilee, also 100 percent owned by Anadarko, was discovered in April 2003 in 8,800 feet of water. The discovery well encountered 83 feet of net pay. The prospect is on Atwater Valley blocks 305 and 349 and on Lloyd Ridge blocks 265 and 309.
Kerr-McGee discovered Merganser in 2001. Four high-quality Miocene reservoirs were penetrated. Located on Atwater Valley blocks 36 and 37 in 7,900 feet of water, Merganser is operated by Kerr-McGee with a 50 percent working interest. Devon holds the remaining 50 percent interest.
Dominion announced the San Jacinto discovery in April 2004. The discovery well encountered about 100 feet of net pay in multiple reservoir sands.
An appraisal well confirmed the discovery. Located on DeSoto Canyon blocks 618 and 619, San Jacinto is operated by Dominion with a 53 percent interest. Spinnaker holds a 27 percent interest in the discovery and Kerr-McGee a 20 percent interest.
San Jacinto will be developed along with the nearby Spiderman field, discovered by 45 percent owner and operator Anadarko in November 2003.
Located on DeSoto Canyon blocks 620 and 621, the discovery well encountered more than 140 feet of net pay. Dominion holds a 36.67 percent interest in the field and Spinnaker an 18.33 percent interest.
Vortex was discovered by Australia’s BHP Billiton in December 2002, but is currently owned 50-50 by Kerr-McGee and Anadarko. Located on Atwater Valley blocks 217 and 261 and Lloyd Ridge blocks 177 and 221, the discovery well is said to have encountered 75 feet of high-quality pay.
