El Paso to Install Deepwater Pipeline
El Paso Energy Partners, L.P. announced that its subsidiary, VK Deepwater Gathering Company, L.L.C., has entered into a letter of intent with the producers of the Medusa discovery located in Mississippi Canyon Block 582 in the Gulf of Mexico to install a new natural gas pipeline from the terminus of El Paso Energy Partners' Viosca Knoll Gathering System at South Pass Block 55 to Medusa. The three producers at Medusa are Murphy Exploration & Production Company (Murphy Expro), a wholly owned subsidiary of Murphy Oil Corporation (NYSE: MUR); British-Borneo Deepwater L.L.C., which is owned by Agip Petroleum Co. Inc., a member of the Eni Group; and Callon Petroleum Operating Company, a wholly owned subsidiary of Callon Petroleum Company.
The 37-mile, 12-inch diameter pipeline will extend into the Deepwater Trend in water depths up to 2,200 feet. Located approximately 60 miles offshore Louisiana, the pipeline will be capable of transporting up to 160 million cubic feet per day of natural gas and will deliver the gas production into the Viosca Knoll Gathering System and to El Paso Corporation's Tennessee Gas Pipeline system. Construction of the pipeline is scheduled to begin in the spring of 2002 with first production from the Medusa development anticipated in the fourth quarter of the same year.
"We are pleased to be working with Murphy Expro and its partners to provide the pipeline infrastructure needed to serve their major deepwater development at Medusa," said James Lytal, president of El Paso Energy Partners. "The pipeline will be strategically positioned to serve future discoveries in the surrounding area. This investment illustrates our focus of meeting the demand for pipeline infrastructure to accelerate the development of new energy supplies from the Deepwater Trend in the Gulf of Mexico."
Since late 1999, El Paso Energy Partners has completed a number of Deepwater projects, including the Allegheny Oil Pipeline and the East Breaks Gathering System, which serves the Hoover Diana Field development. The company also assumed operation of the Poseidon Oil Pipeline System, acted as project manager on the construction of oil and gas export pipelines for the Typhoon Field development, and successfully installed the Prince Tension Leg Platform and oil and gas export pipelines.