Chevron looks at undersea line to move Hebron oil to Hibernia

Don Whiteley

Petroleum News contributing writer

In an attempt to revive the mothballed Hebron offshore oil project, Chevron Canada Resources Ltd. is looking at a $1 billion undersea pipeline to get the heavy oil to Hibernia for production and shipment to onshore refineries.

A report in the Toronto Globe and Mail outlines this “tie-back” proposal as being possibly the lowest-cost option of four options to produce the heavy oil deposits, lying 350 kilometers southeast of St. John’s, Newfoundland. The field is only 35 kilometers from the Hibernia production platform.

“We would drill subsea wells, trench 35 kilometers to Hibernia and lay the flow lines in that trench back to Hibernia,” Hebron project manager Mark MacLeod said in an interview with the Globe and Mail..

Chevron shelved the Hebron project more than two years ago because the high costs associated with producing and shipping the heavy oil outweighed the benefits. But with global oil prices now around $40 per barrel, and expected to stay north of $30 for the foreseeable future, the numbers have improved.

The pipeline option is estimated to be about one-third the cost of a concrete production platform at Hebron. The other two options involve a floating production, storage and offloading vessel; and drilling equipment at the wellhead in conjunction with a production vessel.

Working against the pipeline option is the fact that it would require far fewer employees, and governments in Eastern Canada look at job creation as the most important component of any large-scale energy developments.

The Hebron oil discovery comprises three fields — Hebron, West Ben Nevis and Ben Nevis — which contain an estimated 400 million to 600 million barrels of heavy oil.

As the operator of Hebron, Chevron has Petro-Canada, Exxon Mobil Corp. and Norway’s Norsk Hydro ASA as partners. The four are also among the seven partners in the $5.8 billion Hibernia concrete platform, which is currently under-utilized.