OFFSHORE PLATFORMS & Services

Offshore platforms are critical components of the offshore infrastructure in the Gulf of Mexico, supporting drilling and production operations, and playing a key role in the overall development of offshore oil and natural gas reserves. Platforms are used to:

Connect the offshore pipeline grid;
Provide an efficient means to perform pipeline maintenance;
Locate compression, separation, production handling and other facilities; and,
Conduct drilling operations during the initial development phase of an oil and natural gas property.

We have interests in seven multi-purpose offshore platforms in the Gulf of Mexico that are specifically designed to be used as hubs and production handling and pipeline maintenance facilities. Through these facilities we are able to provide a variety of midstream services to increase deliverability for and attract new volumes into our offshore pipeline systems.

Our platforms generally earn revenues through demand and commodity charges. A demand charge is a fixed fee that is charged to a customer contracted to use our platform services regardless of the volume the customer delivers to the platform. A commodity charge is typically a fixed fee per Mcf of natural gas or barrel of crude oil multiplied by the volume delivered to the platform. Contracts for platform services often include both demand and commodity charges, but demand charges generally expire after a fixed period of time.

In November 2004 we announced the Independence Hub and Trail project, which includes a new deepwater platform to be located in Mississippi Canyon Block 920 that will serve as a host for at least 6 natural gas fields in the Atwater Valley, Desoto Canyon, and Lloyd Ridge areas of the Gulf of Mexico. We will design, construct, and own the 105-foot deep-draft, semi-submersible platform with Cal-Dive International, who has a 20% interest in the project. Once completed, the platform will be operated by Anadarko. First production is expected in 2007.

Facility	Ownership Interest	Natural Gas Handling Capacity (MMcf/d)	Oil & Condensate Handling Capacity (MBPD)
East Cameron 373	100%	190	5
Viosca Knoll 817	100%	140	5
Ship Shoal 331	100 %	— ⁽¹⁾	— ⁽¹⁾
Ship Shoal 332 A and B	50%	— ⁽¹⁾	— ⁽¹⁾
Garden Banks 72	50.0%	80	55
Falcon Nest	100	400	2
Marco Polo	50.0%	300	120
Independence Hub⁽²⁾	100.0%	850	5

⁽¹⁾Primarily serves as a junction platform for pipeline interconnects. ⁽²⁾Announced project with anticipated date of in-service 2007.