INDEPENDENCE HUB PLATFORM
BP'S ATLANTIS PLATFORM:
A significant source of crude oil for
Cameron Highway Oil Pipeline
While the Gulf of Mexico has been a prolific and reliable source of domestic oil and gas for decades, only recently has the energy industry begun to realize the potential that lies in the ultra deepwater region of the Gulf in depths greater than 5,000 feet. In 2007, Enterprise strengthened its position as a leader in providing the infrastructure necessary to develop these vast reserves with the installation of the record-breaking and internationally recognized Independence Hub and Trail. Besides setting new benchmarks for technical and engineering achievement, the project also established a new model for cooperation with producers that will serve as a blueprint for deepwater development initiatives in the future.
INDEPENDENCE
The partnership began earning demand revenues in March of 2007 followed by first flows of natural gas and associated volumetric fees beginning in July. In the first quarter of 2008, the Independence Hub and Trail handled about 900 million cubic feet per day of natural gas. The platform and pipeline can accommodate up to 1 Bcf/d of natural gas, an estimated 12 percent increase in deliveries from the Gulf. At this volume, Independence would generate approximately $214 million in annual gross operating margin for Enterprise.
In 2007, the Independence project was recognized for its record-setting technical advances and collaboration with the Excellence in Project Integration Award from the International Petroleum Technology Conference and the Five Star Award presented by Offshore Magazine. Some of the world-record achievements of the Independence project include:
- Deepest pipeline and riser (8,000 feet)
- Deepest platform (8,000 feet)
- Deepest subsea production (9,000 feet)
- Largest offshore gas processing facility (1 Bcf/d)
- Longest mooring lines (12 lines, 2.4 miles each)
- Deepest water depth installation for suction pile (8,000 feet)
- Deepest pipeline inline future tie-in subsea structure (6,500 feet)
Looking ahead, the Independence Hub will continue to anchor Enterprise’s strategy to capture value from the expanding deepwater play in the Gulf of Mexico. A lease sale conducted by the Minerals Management Service (MMS) in 2007 attracted bids on 80 exploration blocks within a 50-mile radius of the platform. A separate lease sale held in 2008 added another 43 blocks within the 50-mile radius around the Hub. This significant leasing activity points to the strategic value of the Independence Hub and Trail and is a strong indicator that the deepwater trend will remain active for many years to come.
OTHER OFFSHORE
With an extensive network of offshore infrastructure, Enterprise is well positioned to capitalize on growth opportunities in other deepwater areas. In the Southern Green Canyon play, an important development for Enterprise in 2007 was the December start-up of production from BP’s Atlantis discovery. BP projects production from Atlantis to reach as much as 200 MBPD by the end of 2008 — production that, with the exception of MMS royalty volumes, is dedicated to Enterprise’s jointly-owned Cameron Highway Oil Pipeline System (CHOPS). Atlantis is expected to provide a significant portion of the near term growth on Enterprise’s offshore oil pipelines. Also, in the Southern Green Canyon play, the partnership’s Marco Polo platform, the 2007 Offshore Technology Conference’s Distinguished Achievement Award recipient, will accommodate the expected ramp-up of production from the Genghis Khan field.
Other drivers of future growth for Enterprise offshore pipelines include potential subsea tiebacks to the partnership’s Constitution Oil and Gas System. With only tie-in work remaining, the partnership’s new Shenzi Oil Pipeline is on schedule to be in service by the second quarter of 2009. The Shenzi pipeline will have a capacity of 230 MBPD of crude oil and will provide access to the CHOPS and Poseidon pipelines through Enterprise’s Ship Shoal 332 A/B junction platform. Strong leasing activity in the Lower Tertiary Trend in 2007 also presents significant future growth potential for Enterprise.