Williams Commissions New Deepwater Pipeline

A unit of Williams has begun receiving production into a new deepwater pipeline that was recently completed in the western Gulf of Mexico.

The oil production is coming from the Gunnison field operated by Kerr-McGee, in the Garden Banks area, located in 3,150 feet of water. Kerr-McGee's partners in the Gunnison field are Nexen Inc. and Cal Dive International.

Alan Armstrong, senior vice president of Williams' midstream business, said, "The deepwater Gulf continues to be an attractive growth area for our midstream business. Investments like our Gunnison pipeline continue to increase our scale in the Gulf and grow cash flows from fee-based businesses for our shareholders."

Williams' new 18-inch-diameter pipeline became operational on Dec. 14 and has a capacity of transporting an estimated 84,000 barrels per day of oil. The pipeline, built and installed on time and on budget by Global Industries, extends 96 miles from Garden Banks block 668 to Williams' shallow-water platform at Galveston block A244. From the platform, the oil is delivered onshore under a joint tariff with ExxonMobil's Hoover Offshore Oil Pipeline System.

Gunnison is the second hub project where Williams has provided transportation services for Kerr-McGee. Williams also gathers oil and gas for Kerr-McGee in the Nansen and Boomvang blocks in the East Breaks area of the Gulf of Mexico.

Rory Miller, director of deepwater services for Williams, said, "Everything came together like clockwork for this startup, from the producers to our construction contractor. We're pleased to provide deepwater infrastructure services to highly successful independents like Kerr-McGee, which continues to reduce the time and costs required to develop these prolific fields. We're very impressed with the way Kerr-McGee manages its developments."

Williams' next deepwater project, a floating production system and associated pipelines initially built to serve the Devils Tower discovery, is scheduled to be in service in the second quarter of 2004. The facility is located about 180 miles southeast of New Orleans at Mississippi Canyon block 773 at a depth of 5,610 feet.