Chevron Moves Forward with $185 Million Gemini Development

Texaco and Chevron are proceeding with a $185 million subsea production system for their Gemini prospect, a subsproject in the deepwater Gulf of Mexico.

Gemini is located in Mississippi Canyon Blocks 291/292/247, approximately 90 miles southeast of New Orleans in 3,400 feet of water. Texaco Exploration and Production Inc., a subsidiary of Texaco Inc., is the operator of the project with a 60 percent working interest. Chevron U.S.A. Production Company holds a 40 percent working interest.

Projected recoverable reserves for the project are estimated at 250 to 300 billion cubic feet of gas and 3 to 4 million barrels of condensate. Initial production is scheduled for mid-1999, with peak daily rates of 150 to 200 million cubic feet of gas and 2,000 to 3,000 barrels of condensate.

According to Claire S. Farley, President of Texaco North America Production, the Gemini project has significant short term as well as long term benefits. "Gemini will deliver first production in less than 18 months putting the project on a fast track. It will also establish the initial infrastructure in the Mississippi Canyon region where Texaco and Chevron are joint owners of more than 30 leases. Accomplishing these two important objectives will enable us to further develop the prospects we have in the deepwater Gulf which is a key element of Texaco's strategic plan to realize annual production growth of some eight percent over the next five years."

The scope of the $185 million Gemini subsea development project consists of the drilling of two development wells, the completion of one existing exploratory well, the design, fabrication and installation of processing facilities on an existing host platform, a subsea manifold system and dual gas export flowlines. Drilling is scheduled to begin in the second half of 1998.

The production system consists of three wells tied into a subsea manifold flowing 27 miles via dual 12-inch flowlines to an existing processing platform in Viosca Knoll Block 900. Chevron is operator of this facility with a 75 percent interest and Texaco holds the remaining 25 percent interest.

"This system is based on field proven subsea technology and offers the flexibility for future third party production tie-ins," said Robert S. Lane, Vice President of Texaco North America Production - East. "We will focus on system reliability and operability, and at the same time strive to minimize costs."

Gemini is a subsproject that was discovered in 1995. In May 1996 the interval to be developed was tested in the No. 1 exploratory well at a rate of 32 million cubic feet of natural gas and 627 barrels of condensate per day. Evaluation of the test data indicates that even higher flow rates can be expected when wells are completed for production.