Poseidon to Transport Crude from Front Runner Area

GulfTerra Energy Partners reports that Poseidon has executed an agreement for the movement of crude oil from the Front Runner field, which is located in 3,500 feet of water in Green Canyon Blocks 338 and 339 in the Central Gulf of Mexico, approximately 135 miles southeast of Houma, Louisiana. Poseidon will construct, own, and operate the Front Runner pipeline, a new 36-mile, 14-inch pipeline that will connect the field with Poseidon's existing system at Ship Shoal Block 332. The new pipeline will have a capacity of 65,000 barrels per day and will be capable of expanding to approximately 125,000 barrels per day. Poseidon expects the Front Runner pipeline to be operational by mid-2004.

The Front Runner field is owned by Murphy Exploration and Production Company, Dominion Exploration and Production, Inc., and Spinnaker Exploration Company (the Front Runner Producers). Currently, the Front Runner Producers are constructing a Spar-type floating production system capable of handling daily production of 60,000 barrels of crude oil and 110 million cubic feet of natural gas. The floating spar platform will serve as a production hub for the Front Runner, Front Runner South, and Quatrain fields. Murphy estimates that the three fields hold an estimated total of 150 million to 230 million barrels of oil equivalent. The Front Runner Producers have dedicated a total of thirteen contiguous blocks to Poseidon.

Poseidon Oil Pipeline Company, L.L.C., owns and operates the Poseidon Pipeline system extending from the central Gulf of Mexico to onshore Louisiana. The Poseidon owners are GulfTerra Energy Partners, L.P. (36 percent); Shell Oil Products U.S., formerly Equilon Enterprises, L.L.C. (36 percent); and Marathon Oil Company (28 percent). Constructed in 1996, the Poseidon system is a major sour crude oil pipeline system built in response to the increased demand for additional sour crude oil pipeline capacity in the central Gulf.