Independence Hub Headed for Deepwater
Enterprise Products Partners reports that the Independence Hub production platform set sail today from Corpus Christi, Texas, for a five-day trip to Mississippi Canyon Block 920 where it will be installed. The hub, which is owned 80 percent by Enterprise and 20 percent by Helix Energy Solutions Group, Inc., will be located approximately 150 miles southeast of Venice, Louisiana, in about 8,000 feet of water, the deepest to date for an offshore platform.
"The Independence Hub represents one of the most innovative and well coordinated solutions ever for economically developing significant Gulf of Mexico natural gas reserves that would otherwise have remained stranded," said Bob Phillips, Enterprise president and chief executive officer. "The sail away brings us closer to completing this important infrastructure project, which has the capacity to increase natural gas production from the Gulf of Mexico by 1 billion cubic feet per day."
The topsides, which were constructed in Corpus Christi, feature equipment capable of providing processing, compression and measurement services. In September of 2006, the topsides were integrated with the hull, which was built in Singapore, creating the Gulf of Mexico's largest offshore natural gas production platform as measured by production capacity.
Mechanical completion of the platform at the installation site is expected by mid-March of 2007, at which time the Independence Hub platform will begin to earn annual fixed demand fees of approximately $55 million, or $44 million to Enterprise's ownership interest. Natural gas production into the hub is scheduled to begin in the second half of 2007. Once production commences, in addition to the demand fees, the platform and the associated 134-mile Independence Trail natural gas pipeline, which is 100 percent owned by Enterprise, will generate incremental gross operating margin net to the partnership of approximately $17 million per year from volumetric fees for each 100 million cubic feet per day of production.
Phillips added, "With additional discoveries and multiple prospects in the nearby areas accessible to the Independence Hub, and the potential exploration opportunities from opening up Lease Area 181 in the eastern Gulf of Mexico, Enterprise is well positioned to capitalize on future development of natural gas reserves in the deepwater region."
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