Five independent U.S.-based producers have joined Enterprise Products Partners LP in an industry first to begin developing multiple ultra-deepwater natural gas discoveries in the largely untapped Eastern Gulf of Mexico planning area, with first production from a new platform expected by 2007. The gas production would be delivered into a new 850 MMcf/d Tennessee Gas Pipeline extension.

Enterprise affiliate Independence Hub LLC and the Atwater Valley Producers Group, which includes Anadarko Petroleum Corp., Dominion Exploration & Production Inc., Kerr-McGee Oil & Gas Corp., Spinnaker Exploration Co. and Devon Energy Corp., have executed agreements to gather and process gas and condensate production from six deepwater natural gas fields in the Atwater Valley, DeSoto Canyon and Lloyd Ridge areas of the Eastern GOM.

The Atwater Valley group also has dedicated future production from several undeveloped blocks in the region for processing and gathering.

Enterprise will design, construct, install and own Independence Hub, which will be located on Mississippi Canyon Block 920 in 8,000 feet of water just inside the eastern boundary of the federal Central Gulf of Mexico planning area. The 105-foot deep-draft, semi-submersible platform, estimated to cost $385 million, will have a two-level production deck, which will be capable of processing 850 MMcf/d. The platform will be operated by Anadarko, and it is designed to process production from the six anchor fields. The platform will have excess payload capacity to tie-back up to 10 additional fields.

Mississippi Canyon was selected as the location for the permanently anchored host facility based on favorable sea floor conditions and proximity to the identified anchor fields, according to Enterprise.

Under the terms of the agreement, the development will include dedicated anchor fields, Atlas and Atlas NW (Lloyd Ridge blocks 5/49/50), Jubilee (Atwater Valley blocks 305/349 and Lloyd Ridge blocks 265/309), Merganser (Atwater Valley blocks 36/37), San Jacinto (DeSoto Canyon blocks 618/619), Spiderman (DeSoto Canyon blocks 620/621) and Vortex (Atwater Valley blocks 217/261 and Lloyd Ridge blocks 177/221). Development also will include future discoveries on surrounding undeveloped blocks.

The fields will be tied-back to the platform through producer-owned subsea flowline systems. The fields’ water depths range from 7,800-9,000 feet.

Additionally, Enterprise will build a new 140-mile 24-inch diameter pipeline named Independence Trail, which will have a capacity of 850 MMcf/d. The $280 million pipeline will redeliver the gas production from Independence Hub into a Tennessee Gas Pipeline located in West Delta 68.

Tennessee’s Louisiana Deepwater Link pipeline project offers access to markets in the Gulf Coast, Southeast, and Northeast regions. “Tennessee continues to expand its access to critical supply regions while providing liquid trading points and flexible transportation services for our customers,” said Stephen C. Beasley, president of El Paso’s Eastern Pipeline Group. “The Gulf of Mexico has long been a major component of our diverse supply portfolio, and this deepwater Gulf of Mexico project demonstrates our ongoing commitment to attract incremental supplies to the Tennessee system.”

Tennessee will lay two pipelines from its existing Grand Isle 43 system, located on the southeastern coastline of Louisiana, to a new junction platform to be built in West Delta 68 and connecting to Independence Trail. The project facilities are scheduled to be placed in service October 2006.

Enterprise said the dedication of reserves from these fields and the surrounding area allows for the development of additional energy resources to meet ever-increasing demand, while providing new infrastructure for economical development of future discoveries in the area.

Anadarko discovered the Atlas field in June 2003, and a satellite discovery, Atlas NW, followed in January 2004. It also discovered the Jubilee field in April 2003, and it holds a 100% interest in both fields. Kerr-McGee discovered Merganser in 2001, in a field located about 180 miles south of Mobile, AL. Kerr-McGee is the operator with a 50% working interest, and Devon holds the remaining 50% working interest.

Dominion E&P discovered gas at the San Jacinto prospect in April 2004 in a field located 140 miles south of Mobile Bay. Dominion is the operator with a 53% working interest, Spinnaker has a 27% working interest and Kerr-McGee has a 20% working interest.

The San Jacinto field will be developed jointly with the Spiderman discovery, which was made in November 2003. Anadarko is the operator and holds a 45% working interest. Dominion holds a 36.67% interest and Spinnaker holds a 18.33% interest. Anadarko and Kerr-McGee jointly hold 50% working interest in the Vortex field, which was discovered in December 2002.

Enterprise said it already has awarded key contracts to a number of service companies including:

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