Enterprise increasing platform & pipeline capacity for Independence Hub

Enterprise Products Partners LP says it has secured agreements with the Atwater Valley Producers Group to increase both the processing capacity of the Independence Hub platform and the transportation capacity of the Independence Trail Natural Gas Pipeline from 850 MMcf/d to 1 Bcf/d.

Offshore staff

(US) - Enterprise Products Partners LP says it has secured agreements with the Atwater Valley Producers Group to increase both the processing capacity of theIndependence Hub platform and the transportation capacity of the Independence Trail Natural Gas Pipeline from 850 MMcf/d to 1 Bcf/d.

These expansions of approximately 150 MMcf/d are required to accommodate expected natural gas production from three additional discoveries made in the area since the time the project was initially sanctioned.

The Atwater Valley Producers Group includes Anadarko Petroleum Corp., Dominion Exploration & Production, Inc., Kerr- McGee Oil & Gas Corp., Hydro Gulf of Mexico, LLC, formerly Spinnaker Exploration Co., Devon Energy Corp., and Energy Resources Technology, Inc., a wholly owned subsidiary of Cal Dive International Inc.

The three additional natural gas discoveries pegged for tieback to theIndependence Hub are the Mondo NW field, discovered in January 2005 (Anadarko 50% working interest and operator; Murphy Oil 50% working interest), the Cheyenne field, announced in January 2005 (Anadarko 100% working interest) and the Q field, discovered in June 2005 (Hydro 50% working interest and operator; Dominion 50% working interest).

The cost of the expansion is approximately $28 million, and is principally supported by an increase in fixed fees that the Atwater Valley Producers Group will pay during the first five years of operations of theIndependence Hub platform.

The facilities, currently under construction, are expected to be installed in 2006 followed by first production in 2007.

The Independence Hub and Trail projects, first announced in November 2004, are being developed to process and gather natural gas and condensate production from the Atwater Valley, DeSoto Canyon, Lloyd Ridge and Mississippi Canyon areas located in the eastern region of the deepwater GoM.

At the time of the announcement there were seven natural gas fields discovered. As part of the original agreement, the Atwater Valley Producers Group dedicated future production from a number of undeveloped blocks in the area.

"We are pleased to announce this expansion which will increase the capacity of theIndependence Hub platform and pipeline projects by 18%, as a result of producers' continuing success in the development of this important area of the deepwater trend," said Robert G. Phillips, president and CEO.

"With 10 natural gas fields discovered on the acreage dedicated to these facilities, I believe this project is supported by one of the best reserves to production profiles of any deepwater project that we have developed in the GoM over the past 10 years," said Phillips.

"Furthermore, we are pleased to report that the project remains on schedule and on budget and will be an important source of new natural gas production to meet the nation's growing energy needs."

TheIndependence Hub, which is 80% owned by affiliates of Enterprise, and 20% owned by Cal Dive International, Inc., is a 105-ft deep-draft, semisubmersible platform with a two-level production deck. The facility will be installed on Mississippi Canyon block 920 in 7,920 ft of water.

The platform is currently under construction with the hull approximately 60% complete and the topsides facilities approximately 70% complete. The platform is expected to be completed in 1Q 2007. Anadarko will operate the platform that is designed to process production from the initial 10 anchor fields. The facility will also be equipped with excess payload capacity to tie-back up to nine additional subsea pipelines.

The Independence Trail Natural Gas Pipeline, which is wholly owned by an affiliate of Enterprise, is a new 134-mi, 24-in pipeline that will transport production from theIndependence Hub to an interconnect with Tennessee Gas Pipeline located in West Delta block 68.

Construction of the pipeline is scheduled to be completed in 4Q 2006. Both the platform and pipeline are fully subscribed by the Atwater Valley Producers Group for the first five years of service.

1/11/06

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