Poseidon constructed, owns and operates the Front Runner oil pipeline, a new 36-mile, 14-inch pipeline that connects the Front Runner field with Poseidon's main pipeline at Ship Shoal Block 332. The Front Runner oil pipeline has the capacity to transport 65,000 barrels of crude oil per day and can be expanded to transport up to 125,000 barrels of crude oil per day.
The Front Runner field, which is owned by Murphy Exploration and Production Company, Dominion Exploration and Production, Inc. and Spinnaker Exploration Company, is located in 3,100 feet of water in the Green Canyon Blocks 338 and 339 in the Central Gulf of Mexico. The field is currently producing in excess of 10,000 barrels per day of crude oil from the first of eight wells, and is expected to produce up to 60,000 barrels per day of crude oil and 110 million cubic feet per day of natural gas. Murphy estimates that the Front Runner and Front Runner South fields, together with the Quatrain field, in which Murphy also owns a working interest, have reserves of 150 to 230 million barrels of oil equivalent. The producers have dedicated a total of 13 contiguous blocks in this area to Poseidon.
The Tarantula field is located in 480 feet of water in South Timbalier Block 308 and is connected to the Poseidon system by a new four-mile gathering pipeline owned by Enterprise. The field development, which is owned by Apache Corporation, consists of a fixed platform designed to initially handle 30,000 barrels of crude oil per day and production from four wells.
"First production from the Front Runner and Tarantula oil fields is a major milestone in the development of the Poseidon system," said O.S. Andras, vice chairman and chief executive officer of Enterprise. "The new Front Runner pipeline will also benefit Poseidon by providing new pipeline capacity into the prolific Southern Green Canyon oil basin in the deepwater Gulf of Mexico. The Poseidon pipeline began receiving crude oil produced from the Marco Polo field in the Southern Green Canyon area during the third quarter of 2004, and should see significant increases in production when the K2 and K2 North fields come on in mid-2005."
The owners of Poseidon Oil Pipeline Company, L.L.C. and their ownership interests, in addition to Enterprise's 36 percent interest, are Shell Oil Products U.S., which owns a 36 percent interest, and Marathon Oil Company, which owns a 28 percent interest. The Poseidon system, which was constructed in 1996, is a major sour crude oil pipeline built in response to the increased demand for additional sour crude oil pipeline capacity in the central Gulf of Mexico.
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