Gulf of Mexico

Leonard Le Blanc
Houston

• The proposed Nautilus pipeline extension will be bringing up new gas from the Green Canyon sector of the US Gulf of Mexico. [29912 bytes]

Green Canyon pipeline extension will tap new gas volumes

A $220 million natural gas pipeline will be built Marathon, Shell, and Leviathan Gas Pipeline Partners to serve the Green Canyon production areas in the central Gulf of Mexico. The planned system consists of a new interstate gas pipeline to shore and expansion of an existing Manta Ray gas gathering system.

The line will help relieve full gas pipelines in this area of the US Gulf, and help route increasing volumes being developed in deepwater without recourse to markets. The Nautilus line is the third pipeline extension announced this year to help transport deepwater gas volumes.

The interstate segment, named Nautilus, consists of a 30-in. line which will extend 87 miles from Ship shoal Block 207 to the gas plants in the South Bend, Louisiana area. This new system will eventually have a capacity of some 600 MMcfd. The Nautilus line will operated under the jurisdiction of the US Federal Energy Regulatory Commission.

Upstream of the Ship Shoal 207 terminal, the existing Manta Ray gas gathering system will be extended into a broader gathering spine that will service both shelf and deepwater production around Ewing Bank Block 873 to the east and Green Canyon Block 65 to the west. Both Marathon and Shell have large acreage positions in the area, included Troika in Green Canyon Block 244, and will provide the majority of the capital funding for the new construction. The balance of the funding will be provided by Leviathan through case and the contribution of existing Manta Ray gathering system assets. Troika's lease is held by Marathon, BP, and Marathon. The new system will be ready for service in the third quarter of 1997.

Chevron second to order Spar unit

Chevron will spend about $300 on a new and larger spar-shaped floating drilling and production facility for the US Gulf of Mexico. The unit will produce the Genesis prospect, located in Green Canyon 205. The block was previous known as Vancouver.

A spar is a cylindrical hull that floats vertically. Oryx was the first firm to order a spar-shaped unit. The unit is under tow across the Atlantic Ocean and is slated to be installed shortly on the Neptune prospect. The Genesis spar unit is slated for installation in the summer of 1998. The new unit will be 220 meters high and 37 meters in diameter.

Water depth at the Genesis site is 800 meters. Fabrication of the hull will begin this summer at Aker Rauma Offshore in Finland, the same construction site as the Oryx spar unit. The topsides are being fabricated by McDermott, which also built the Oryx spar topsides. Spars International, owned jointly by Aker and McDermott, is responsible for design and engineering.

Chevron reportedly will spend $750 million to develop the prospect. Genesis is Chevron's first deepwater development. Chevron was the high bidder on 118 tracts in the 1995-1996 US federal lease sales and now holds 182 tracts in water depths exceeding 1,000 ft.

Broken Hill expands operations in US Gulf

BHP Petroleum will this year spend $A110 million on exploration in the US Gulf of Mexico. The firm hopes the use of advanced drilling technology will yield large quantities of oil and gas in deepwater.

By the end of 1997, BHPP plans to have drilled six exploration wells and started the evaluation of two discoveries - Pluto and Neptune - which were drilled in 1995. The expansion of the program follows a two-year redirection of its US strategy.

BHPP abandoned its low grade gas assets and turned its focus to large scale deepwater reserves. Last year, the firm spend $A384 million on US exploration. The US strategy is part of a worldwide industry trend toward deepwater exploration and production, reflecting a decline of conventional offshore plays in non-OPEC countries.

BHPP spokesman, Dr. Robert Porter, said BHPP recognized deepwater plays represented greater risks and involved substantially more capital, but the productivity of the US Gulf, plus a favorable fiscal regime in the US, helped reduce risks. In the latest round, BHPP bid on 143 leases.

Gemini subsalt prospect significant

Texaco's Gemini subsalt prospect in the US Gulf of Mexico tested at a combined rate of 54 MMcfd of gas and 4,405 b/d condensate from two intervals. Texaco confirmed that the gas field is commercial, and the operator hoped to develop other related structures around it to maximize production in the area.

Appraisal drilling on Gemini will begin in early 1997. Gemini is located in Mississippi Canyon Block 292 in 3,393 ft water depths. Texaco has a 60% working interest in the prospect and Chevron has the remaining 40%. Texaco was a successful bidder on 105 new deepwater leases in the recent US Gulf lease sale.

Gemini was one of three deepwater discoveries in the US Gulf announced by Texaco in 1995. The exploratory well was drilled to a depth of 17,976 ft. The prospect's first interval flowed at 22 MMcfd and 3,778 b/d condensate (46.5 degree API gravity) with 3,892 psi of flowing tubing pressure on a 36/64 choke. That particular interval is capable of achieving 50 MMcfd. The second interval tested at 32 MMcfd and is capable of producing at 80 MMcfd.

INDUSTRY BRIEFS . . .