Genesis has been awarded an Enterprise Framework Agreement by Shell Global Solutions International B.V., covering Subsea Umbilical Risers and Flowlines (SURF), Engineering and Project Management Services.
The contract duration is 5 years, with the option to extend for an additional 5 years and will cover the supply of services to support all of Shell’s SURF projects on a worldwide basis. The contract will focus on Shell’s activities in the Gulf of Mexico and Brazil and will initially be managed from the Genesis office in Houston, Texas.
John Cambridge, Managing Director of Genesis, stated: “We are very excited about this contract with Shell. It demonstrates the impact that the newly integrated Genesis organization is having on the worldwide subsea engineering market.”
Genesis is a market-leading engineering company focused on providing engineering and technical services to the global upstream oil and gas industry. The company’s services are utilised by oil and gas companies during its planning and development phase of oil and gas projects and in the execution of subsea onshore and offshore engineering projects. Its clientele includes super-majors and national oil companies, as well as small independents.
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Genesis Energy, L.P. announced yesterday that it has entered into definitive agreements to acquire from Marathon Oil Company interests in several Gulf of Mexico crude oil pipeline systems, including its 28% interest in Poseidon Oil Pipeline Company, L.L.C., its 29% interest in Odyssey Pipeline L.L.C., and its 23% interest in the Eugene Island Pipeline System.
Marathon Oil Company is a wholly-owned subsidiary of Marathon Oil Corporation . The Poseidon and Odyssey interests are subject to the expiration or waiver of rights of first refusal, and Genesis is not obligated to consummate any transaction unless it is ultimately successful in acquiring the interest in Poseidon. Additionally, Marathon Oil has the right to dispose of certain of the other oil pipeline assets prior to any final closing of a transaction with Genesis.
The purchase consideration for all of the assets, subject to usual and customary adjustments for debt, working capital, etc., is $205.76 million, which includes an estimated $29 million valuation of crude oil line fill at current market prices owned by the interests to be acquired. Genesis intends to finance the transaction with the more than $400 million of funds available under its revolving credit facility and expects the transaction to close before year end.
The Poseidon system is comprised of a 367-mile network of crude oil pipelines, varying in diameter from 16 to 24 inches, with capacity to deliver approximately 400,000 barrels per day of crude oil from developments in the central and western offshore Gulf of Mexico to other pipelines and terminals onshore and offshore Louisiana. Affiliates of Enterprise Products Partners L.P. and Shell Oil Company each own a 36% interest in Poseidon. An affiliate of Enterprise will continue in its role as operator of Poseidon.
The Odyssey system is comprised of a 120-mile network of crude oil pipelines, varying in diameter from 12 to 20 inches, with capacity to deliver up to 300,000 barrels per day of crude oil from developments in the eastern Gulf of Mexico to other pipelines and terminals onshore Louisiana. An affiliate of Shell owns the remaining 71% interest in Odyssey. An affiliate of Shell will continue to serve as the operator.
The Eugene Island Pipeline System is comprised of a 183-mile network of crude oil pipelines, the main pipeline of which is 20 inches in diameter, with capacity to deliver approximately 200,000 barrels per day of crude oil from developments in the central Gulf of Mexico to other pipelines and terminals onshore Louisiana. Other owners in Eugene Island include affiliates of Exxon-Mobil, Chevron-Texaco, ConocoPhillips and Shell Oil Company. An affiliate of Shell will continue to serve as the operator.
“This acquisition represents another exciting growth opportunity for Genesis,” said Grant Sims, Genesis’ Chief Executive Officer. “These pipelines, especially Poseidon, would complement our existing infrastructure in the Gulf of Mexico, and enhance our ability to provide attractive capacity and market optionality to producers for their existing and future developments as well as our refining customers onshore Texas and Louisiana. The Gulf of Mexico is an important and growing resource basin in the U.S. that we are convinced will be safely, responsibly and efficiently developed for many years to come.”
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