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Hub bigger than planned? Mounting gas discoveries in eastern Gulf of Mexico drive producers group to consider expanding Independence Hub’s daily output to 1 billion cubic feet By Ray Tyson Petroleum News Contributing Writer
Natural gas discoveries are adding up so rapidly in the eastern Gulf of Mexico that area producers are now looking at the real possibility of significantly expanding throughput capacity of the future Independence Hub production facility, scheduled to come on-line in the third quarter of 2007.
The proposal would increase daily hub capacity to 1 billion cubic feet compared to 850 million cubic feet in the original plan, a nearly 18 percent increase. If approved, Independence Hub would truly rank among the leading gas-production facilities in the deepwater Gulf.
“We haven’t made that decision yet, but we’re evaluating,” Mark Pease, senior vice president of exploration and production for Independence Hub operator Anadarko Petroleum, said in an Oct. 28 conference call.
Since field owners who make up the so-called Atwater Valley Producers Group announced the hub project in November 2004, Anadarko alone has added two discoveries to the mix, Cheyenne and Mondo NW. Additionally, group members Spinnaker Exploration and Dominion E&P have said they want to pipe gas from their Q gas discovery through Independence Hub.
That makes a total of at least 10 natural gas discoveries that would be tied back to Independence Hub: Cheyenne, Mondo NW, Q, Spiderman, San Jacinto, Atlas, Atlas NW, Jubilee, Merganser and Vortex. Anadarko looking at expansion In addition to Anadarko, Spinnaker and Dominion, members of the Atwater Valley group include Kerr-McGee, Devon Energy and Murphy Oil.
“One of the things we’re doing with the hub — with some additional discoveries that have been made out there and additional technical work that we’ve done in terms of deliverability on our existing discoveries — is looking at expanding the capacity of the hub,” Anadarko’s Pease said.
However, the producers “are obviously real focused” on keeping project deadlines, Pease said, adding that “we’re right on schedule and right on budget.”
Marine construction company Cal Dive International took a 20 percent stake in Independence Hub, while 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, which holds interests in five of the contributing fields.
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 located on West Delta Block 68. Independence Hub, to be located on Mississippi Canyon Block 920, will be moored in about 8,000 feet of water, qualifying it as the deepest development in the U.S. Gulf. It will process gas from fields located in nearby Atwater Valley, DeSoto Canyon and Lloyd Ridge.
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.
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