El Paso Builds Natural Gas Pipeline for Red Hawk Field

El Paso Energy Partners, L.P. will build and operate a new 16-inch pipeline to gather natural gas production from the Red Hawk field located in the Garden Banks area of the central Deepwater Trend of the Gulf of Mexico. EPN has finalized the related agreements with Kerr-McGee Oil and Gas Corp., a wholly owned subsidiary of Kerr-McGee Corp. and Ocean Energy, Inc., which each hold a 50-percent working interest in the Red Hawk field. The 86-mile pipeline, capable of transporting up to 330 million cubic feet per day (MMcf/d) of natural gas, will originate in 5,300 feet of water at the Red Hawk field and connect to the ANR Pipeline system at Vermilion block 397. EPN plans to place the new pipeline in service during the second quarter of 2004.

Discovered in October 2001, the Red Hawk field is located in an active exploratory and development area of the western Gulf of Mexico. Development drilling at the Red Hawk field is expected to begin in early 2003. The producers have estimated proven reserves of more than 250 billion cubic feet of natural gas. Kerr-McGee, the field operator, will develop the field using the world's first cell spar, with initial production capacity of 120 MMcf/d and ultimate capacity of 300 MMcf/d. The producers expect the Red Hawk production facility to become a host structure for the cost-effective development of nearby satellite fields.

"We are very excited to be working with Kerr-McGee and Ocean, two premier independent exploration companies that have enjoyed substantial success in the Deepwater Trend of the Gulf of Mexico," said Robert G. Phillips, chief executive officer of EPN. "This new pipeline reinforces our commitment and leadership in developing essential infrastructure for new discoveries in the Gulf of Mexico Deepwater Trend. The Red Hawk project is structured similarly to many of our other Deepwater infrastructure projects with a solid anchor field, strategically located in an active exploratory area, and being developed by experienced operators like Kerr-McGee and Ocean. We believe the Red Hawk gathering system may establish EPN as a major gas supply aggregator in the Garden Banks/Green Canyon corridor and could lead to additional opportunities to serve producers in this area."