USA: Discovery to Expand Pipeline System in Deepwater Gulf of Mexico

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Williams Partners L.P. and DCP Midstream Partners, LP announced a planned expansion of the Discovery natural gas gathering pipeline system in the deepwater Gulf of Mexico.

Discovery intends to construct the Keathley Canyon Connector, a 20-inch diameter, 215-mile subsea natural gas gathering pipeline for production from the Keathley Canyon, Walker Ridge and Green Canyon areas in the central deepwater Gulf of Mexico.

Discovery has signed long-term agreements with the Lucius and Hadrian South owners for natural gas gathering and processing services for production from those fields.

The Keathley Canyon Connector will originate in the southeast portion of the Keathley Canyon area and terminate into Discovery’s 30-inch diameter mainline near South Timbalier Block 283. The pipeline will be capable of gathering more than 400 million cubic feet per day (MMcf/d) of natural gas.

“With the newly signed anchor customers, the Keathley Canyon Connector will provide us with significant growth opportunities for fee-based deepwater gathering volumes on the Discovery system,” said Rory Miller, president of Williams Partners’ midstream business.

“There is also opportunity for future growth, as it will run in close proximity to several known discoveries and numerous planned-to-be-drilled prospects. It will provide the industry with highly reliable and cost-effective deepwater gathering services and deliver those volumes to our onshore Larose gas processing plant and Paradis fractionator,” Miller said.

“This expansion project, supported by long-term agreements with experienced deepwater producers, facilitates the Discovery system’s ability to attract additional gathering and processing volumes in the future,” said Mark Borer, president and chief executive officer of DCP Midstream Partners, LP.

Construction on the project is expected to begin in 2013, with a mid-2014 expected in-service date. Total capital expenditures for the Keathley Canyon Connector are estimated to be approximately $600 million. Williams Partners’ portion of capital expenditures on this project was included in its 2012 forecast issued on Nov. 1, 2011.

In addition to the offshore gathering system, the Discovery system includes the Larose natural gas processing plant and Paradis fractionation facility. Williams Partners owns 60 percent of the Discovery system and operates it. DCP Midstream Partners, LP owns the other 40 percent of the Discovery system.

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Posted on January 26, 2012, in GoM, United States and tagged , , , , , , , , , , , , , , , , . Bookmark the permalink. Comments Off on USA: Discovery to Expand Pipeline System in Deepwater Gulf of Mexico.

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