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The final stage Producers sorting out final details of Eastern Gulf of Mexico gas hub Ray Tyson Petroleum News Houston Correspondent
Anadarko Petroleum and five other producers are said to be just weeks away from approving a final development plan for a central processing facility to serve five ultra-deepwater natural gas fields in the Eastern Gulf of Mexico.
The producers also are said to have agreed to expand the facility’s daily gas capacity from 700 to 850 million cubic feet to accommodate production from the various fields.
“The final engineering and design work for the processing facility is complete,” Jim Hackett, Anadarko’s chief executive officer, said July 30. “We are in the final process of approving a development plan.”
Just three months ago Eastern Gulf of Mexico producers had narrowed their original 48 development options for a central production facility to just three alternatives. But they disagreed whether the hub should be located in the northern or southern portion of the development area, or possibly in the middle.
“We’ve made a lot of good progress the last three or four months,” said Mark Pease, Anadarko’s senior vice-president of exploration and development. While a site for the production facility has been selected, its location has not yet been disclosed. Five fields part of project Fields to be included in the project include Merganser, Vortex, Jubilee, Mondo and Spiderman. In addition to Anadarko, Kerr-McGee, Devon Energy, BHP Billiton, Spinnaker Exploration and Dominion E&P are the companies that make up the so-called Atwater Valley Producers Group.
Merganser, Vortex and Jubilee are in eastern Atwater Valley, while Mondo is in nearby Lloyd Ridge and Spiderman farther north in DeSoto Canyon. None of the fields is large enough to justify standalone production facilities.
The question now is whether additional discoveries in the region could be included in the project, or whether any other large find in the region would replace any of the current five fields now on the inclusion list.
Not included in the current plan are announced Eastern Gulf discoveries that include Atlas, Atlas Northwest and Jacinto.
“As we work through all the agreements with the parties, we’ll decide how new fields are brought in,” Pease said. “But with the fields that are represented by the groups that are at the table today in negotiations, those volumes will come into the facility,” Pease said. Producers are said to be considering additional hubs in the region that could include current and future discoveries not included in the Atwater Valley plan, including San Jacinto at DeSoto Canyon block 618.
“Any additional success in this area adds weight to development options to the north,” said Roger Jarvis, Spinnaker’s chief executive officer. “We believe increasingly that this area of the Gulf should be developed with its own hub.” Some 20 exploration plans filed Moreover, some 20 exploration plans have been filed with the U.S. Minerals Management by various operators since the Eastern Gulf Planning Area was reopened to leasing a few years ago. In fact, Anadarko and Shell are currently drilling the Cheyenne prospect at Lloyd Ridge block 399, while Kerr-McGee is scheduled to drill the West Raptor prospect on DeSoto Canyon block 445.
Anadarko alone holds title to 38 exploration blocks and at least 17 identified prospects in the region. “We have some other prospects out there … that we will be looking to drill next year,” Pease said.
It was not known exactly who would operate the more southern Atwater Valley production hub. But the producers have settled on using a deep draft semi-submersible rig as the foundation to process gas from discoveries, all of which are below 7,000 feet of water, Anadarko said.
“We’ve gone through all the engineering work, we’ve agreed on what type of facility it will be … and we’ve agreed on a location for that facility,” Pease said.
Key players in the project are hoping to launch production in the 2006-2008 time frame and plan to begin booking reserves by year-end 2004. Anadarko holds a 100 percent interest in Jubilee and Mondo and a 45 percent stake in Spiderman. Dominion and Spinnaker hold the remaining interests in Spiderman, while Kerr-McGee and Devon share ownership of Merganser. BHP and Devon share interests in Vortex.
A similar hub facility was used for the Canyon Express project about 75 miles north of Jubilee, where three fields — Camden Hills, Aconcagua and King’s Peak — were tied into a single gas pipeline with 500,000 million cubic feet of capacity.
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