"We share with our customers and our partners in the excitement of receiving the first production from the Holstein and Mad Dog fields. We look forward to continuing our long-term relationships with producers in the deepwater Gulf of Mexico by providing them with access to the highest value energy markets on the U.S. Gulf Coast through our integrated network of assets," stated O.S. "Dub" Andras, Enterprise's vice chairman and chief executive officer.
Initial oil production of approximately 35,000 barrels per day from three deepwater wells has commenced flowing into the recently completed Cameron Highway Oil Pipeline System, which is jointly owned by affiliates of Enterprise and Valero Energy Corporation. Cameron Highway, a 390-mile 24-inch to 30-inch pipeline, has the capacity to deliver up to 500,000 barrels per day of crude oil from developments in the Gulf of Mexico to the major refining markets along the Texas Gulf Coast located in Port Arthur and Texas City. Cameron Highway is supported by life of lease dedications with BP, BHP Billiton and Unocal to move production from the Holstein, Mad Dog and Atlantis fields and with Kerr McGee to move their production from the Constitution and Ticonderoga fields. Additionally, Cameron Highway has contracted with Shell under a term agreement to move its 50 percent share of production from the Holstein field. The Atlantis, Constitution and Ticonderoga fields are scheduled to commence production in 2006.
Initial natural gas production of approximately 100 million cubic feet per day from the Holstein field has commenced flowing into the Manta Ray Offshore Gathering System and the Nautilus Gas Pipeline, which are jointly owned by affiliates of Enterprise, Marathon Oil Company and Enbridge (US) Inc. The 101-mile 30-inch Nautilus Gas Pipeline system terminates onshore in St. Mary's Parish Louisiana, where the natural gas is processed at Enterprise's Neptune natural gas processing plant. The NGLs that are extracted at the Neptune plant are transported, fractionated, stored and distributed utilizing Enterprise's integrated NGL value chain. The gathering, transportation and processing agreements with BP, BHP Billiton and Unocal include life of lease dedications for the Holstein, Mad Dog and Atlantis developments while Shell's natural gas production from Holstein is gathered and transported under a life of lease dedication and processed under an existing twenty-year contract.
After the natural gas is processed at the Neptune facility, it is redelivered into the Nautilus hub. The hub, which has seven interconnects with interstate and intrastate natural gas pipelines, provides producers access to the major consuming markets in the eastern and central United States, as well as to growing markets within Louisiana. Two of the interconnects are with Enterprise's Acadian Gas Pipeline and Cypress Gas Pipeline that serve major consuming markets in Louisiana.
The Holstein field began producing oil and natural gas in December 2004. At peak production, the field is expected to produce more than 100,000 barrels of oil and 90 million cubic feet of natural gas per day. First production from the Mad Dog field commenced January 2005. The Mad Dog platform has the capacity to handle more than 100,000 barrels per day of crude oil and 60 million cubic feet of natural gas per day. Production from the Atlantis field is expected to begin late in 2006. BP recently announced that it has increased the capacity of its platform currently under construction in the Atlantis development to handle peak production of crude oil at a rate of 200,000 barrels per day, a 33 percent increase over previous estimates, and production of natural gas at 180 million cubic feet per day. The total combined design capacity of the Holstein, Mad Dog and Atlantis platforms is 400,000 barrels of oil per day and 340 million cubic feet of gas per day, and the design oil capacity of the Constitution platform is 70,000 barrels of oil per day.
Enterprise owns a 50 percent interest in and operates Cameron Highway and a 25.67 percent equity interest in both the Manta Ray and Nautilus pipelines. Affiliates of Enbridge (U.S.) Inc and Marathon own a 50 percent and 24.33 percent interest, respectively, in each of the two pipelines. Additionally, Enterprise owns a 66 percent interest in and operates the Neptune processing plant, significant interests in NGL pipelines, fractionators, storage facilities and distribution infrastructure downstream of Neptune and a 100% interest in the Acadian and Cypress pipelines.
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