The Shenzi oil export pipeline will originate at the Shenzi Field, located in 4,300 feet of water at Green Canyon Block 653, approximately 120 miles off the coast of Louisiana. The 83-mile, 20-inch diameter pipeline will have the capacity to transport up to 230,000 barrels per day of crude oil and will connect the field to the Cameron Highway Oil Pipeline and Poseidon Oil Pipeline systems at Enterprise's Ship Shoal 332B junction platform. Enterprise owns a 50 percent interest in Cameron Highway and a 36 percent interest in Poseidon and operates both pipelines.
The Shenzi field is owned by a joint venture comprising BHP Billiton with a 44 percent interest, Repsol E&P USA Inc. and Hess Corporation, each owning a 28 percent interest. Enterprise's new oil export pipeline will connect to a platform being constructed by BHP Billiton to develop the field, with production expected to begin in mid-2009.
"The Shenzi pipeline project provides an incremental expansion of Enterprise's extensive Gulf of Mexico oil infrastructure, expands our value chain and adds another long-term source of oil supplies to our downstream pipeline network," said Robert G. Phillips, Enterprise president and chief executive officer. "The location and design of the new pipeline will also provide us with excess capacity and a competitive advantage to pursue additional opportunities to extend our presence into the newly developing Lower Tertiary play in the Walker Ridge area to the south."
Phillips added, "We are pleased to work with BHP Billiton, Repsol and Hess on this important project, which highlights Enterprise's ability to leverage its existing infrastructure into new opportunities to serve producers operating in the deepwater trend of the Gulf of Mexico. The Shenzi pipeline will provide producers in the area with access to the premier oil markets in both Texas and Louisiana and offer additional benefits for Enterprise through our ownership interest in the Cameron Highway and Poseidon oil pipelines."
The Shenzi oil export pipeline was included in the schedule of organic growth capital projects that Enterprise reviewed with the financial community at its Aug. 16, 2006 analyst and investor meeting in New York City.
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