Williams Starts Up Gulf of Mexico Deepwater Pipelines

A unit of Williams has begun receiving oil and natural gas into new deepwater pipelines that were recently completed in the western Gulf of Mexico.

The production is coming from the Nansen Field in the East Breaks area, located approximately 150 miles south of Houston in 3,700 feet of water. First deliveries of oil were received Jan. 28. First deliveries of gas were received Jan. 30.

Phil Wright, president and chief executive officer of Williams' energy services group, said, "Williams people get things done. We prove it every time we put new steel into the ground or onto the ocean floor. We signed the service agreements with the producers in late 2000 and were able to start bringing their production online in less than 18 months. This adds new volumes for Williams businesses and new revenue for Williams shareholders."

The new pipelines have a capacity of transporting up to 80,000 barrels per day of oil and up to 360 million cubic feet per day of natural gas. For the next couple weeks, initial deliveries into the line are expected to average around 20,000 barrels per day of oil and approximately 10 to 15 million cubic feet per day of natural gas.

Production will continue to ramp up as new Nansen Field wells are tied in during the first and second quarter. The pipes are also designed to serve a neighboring development in the Boomvang Field. Production from Boomvang is expected to begin flowing into the new pipes in May.

Wright added, "This project is backed by dedicated production from deepwater producers Kerr-McGee, Ocean Energy and Enterprise Oil. We can also accommodate volumes from other prospects that may be developed in the East Breaks area. Williams is in an excellent position to become one of the primary service providers in the deepwater Gulf of Mexico, which is one of the most prolific growth basins in North America."

Williams' $200 million East Breaks project is comprised of the 56-mile oil gathering system, the 114-mile gas gathering system, a new state-of-the-art 300 million cubic feet per day gas processing plant in Markham, Texas, and a shallow-water platform at Galveston Block A244. The new Markham gas plant has been fully operational since the fourth quarter 2001.