GULF OF MEXICO

In a bid to operate an LNG receiving and regasification terminal in the Gulf of Mexico, ChevronTexaco submitted a license application to the Department of Transportation, US Coast Guard. The Port Pelican development would feature an LNG vessel receiving terminal, LNG storage and regasification facilities, and pipeline interconnection to existing infrastructure to deliver natural gas into the US interstate gas pipeline network.

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ChevronTexaco files offshore LNG application

In a bid to operate an LNG receiving and regasification terminal in the Gulf of Mexico, ChevronTexaco submitted a license application to the Department of Transportation, US Coast Guard. The Port Pelican development would feature an LNG vessel receiving terminal, LNG storage and regasification facilities, and pipeline interconnection to existing infrastructure to deliver natural gas into the US interstate gas pipeline network.

ChevronTexaco plans to construct phase one of Port Pelican as an offshore facility, initially designed to process 800 MMcf/d. The facility would connect to ChevronTexaco's offshore infrastructure to deliver natural gas to the Gulf coast. Using existing gas supply and gathering systems in the GoM and southern Louisiana, gas would then be delivered to shippers using the national pipeline grid. Phase two would expand the terminal to accommodate 1.6 bcf/d. According to the Raymond James Energy Group, LNG imports into the US have grown at an average annual rate of 60% since 1995, yet LNG imports represent less than 2% of total US supplies.

ChevronTexaco's application followed a 16-month technical and commercial evaluation. It is estimated the first phase of the facility would be operational by 2006.

"We are excited about the prospects for growth of the natural gas business, and this LNG receiving and regasification terminal is integral to the company's larger natural gas strategy," Audie Setters, general manager of ChevronTexaco Overseas Petroleum's International Gas Group, said.

Horn Mountain goes onstream

BP has begun production from a single well at its Horn Mountain development in the Gulf of Mexico. The Horn Mountain 14-slot Spar is in 5,400 ft of water 100 mi southeast of New Orleans in Mississippi Canyon block 127 (Offshore June 2002). The Spar, designed by Alliance Engineering, weighs around 4,500 tons, can accommodate a peak rate of 65,000 b/d and 68 MMcf/d, and is designed to handle subsea tiebacks.

As seven additional production wells are completed, production is expected to start at a rate of 15,000 b/d and 12 MMcf/d of gas. The production facility can accommodate additional incremental production if new discoveries are made in the region. The $600-million project is expected to result in ultimate recovery of an estimated 150 MMboe. The project went from discovery to production in just under 40 months. Drilling started in July 1999, followed by a discovery announcement the next month. The project garnered sanction in October 2000. Eight production wells and two injection wells were drilled in 2001 using the Ocean Victory semisubmersible drilling rig. The completed Spar hull – the submerged portion of the structure – sailed from the yard in Pori, Finland, in April and arrived in the Gulf in late May. The topsides production facility and quarters packages sailed from Ingleside, Texas, in early June. The Spar hull and topsides facilities were mated that month.

BP operates the Horn Mountain field with 67% equity interest; Occidental Petroleum Corp. holds the remaining 33%.

Inteq synthetic fluids used at Eugene Island block 242

Baker Hughes Inteq Drilling Fluids-Apollo Services serviced a well for Stone Energy in Eugene Island block 242 in the Gulf of Mexico. It was Stone's second time using a synthetic-based drilling fluid and the first time using synthetics since new discharge regulations went into effect. Inteq Drilling Fluids SYN-TEQ CF 2002 fluid system was used on the well. Inteq provided fluid environmental services along with Apollo, providing the cuttings dryer, conveyance, and related equipment and staff. More than 8,214 ft of 12 1/4-in. hole was drilled with an average retention of fluids on cuttings of 4.88%. This was well below the 6.9% mandated by the US Environmental Protection Agency under the National Pollutant Discharge Elimination System general permit.


Discoveries and appraisals

•BHP Billiton has reported a natural gas discovery at the Vortex exploratory well in Atwater Valley block 261 in 8,344 ft water depth. Drillship Deepwater Millennium began drilling on Vortex-1 in September 2002. In addition to the initial well, a sidetrack was drilled 2,900 ft west of the No. 1 well to 19,330 ft TD. According to Kerr-McGee, the appraisal well is being evaluated and will be temporarily abandoned. Field operator BHP Billiton holds a one-third interest, and partners Kerr-McGee Corp. and Ocean Energy Inc. also each hold one-third.

•Kerr-McGee is appraising its Merganser natural gas discovery in Atwater Valley block 37 in 8,000 ft water depth. This well was drilled as a sidetrack to the initial appraisal well to test the reservoir's down-dip extent. The well encountered the same primary pay zone as the discovery well, and reserves estimates are 200-400 bcf of natural gas equivalent. Ocean Energy and operator Kerr-McGee each hold 50% working interest.

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•Amerada Hess said its Shenzi exploration well, which reached a measured depth of 26,607 ft, encountered a gross hydrocarbon column of 465 ft with 140 ft of net pay in 4,400 ft of water. A-H holds 28% in the Green Canyon block 654 well. Appraisal drilling will be necessary, the company said.

•Pogo Producing Co. reported finds in West Delta block 54 and Main Pass block 62. The company, which holds 100% of both wells, encountered a 33-ft hydrocarbon column in the primary objective of the West Delta block 54 No. 1 well. A caisson well protector is planned for the field's development, and production should begin in 1Q 2003. Pogo also plans to develop Main Pass block 62 No. 3 with a caisson well protector for production by mid-year 2003. The field found 40 net ft of natural gas pay in the Miocene objective. Pogo CEO Paul G. Van Wagenen said the company has two other exploratory wells being drilled in the Main Pass area of the central Gulf.

•Remington Oil & Gas said its West Cameron block 416 No. 1 exploratory well discovered new gas reserves in a single sand package above 10,000 ft. Production casing has been set and completion operations followed. Production from this well will be tied back via flowline to the company's processing facility on West Cameron block 417 with first production expected in 2Q 2003. Well operator Remington owns 50%, Magnum Hunter Resources 25%, and The Wiser Oil Co. 25%.

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