Destin Stretching System To Reach Production
Although it is yet to be finished, the Destin Pipeline already
is growing, with plans for two extensions to its system in the
eastern Gulf of Mexico production area. Destin Pipeline Co. last
week announced two contiguous extensions, with a total estimated
cost of $52 million, will serve two development projects that
recently dedicated production to the 1 Bcf/d Destin.
Construction of the two extensions, totaling 45 miles, is
expected to begin in September, pending approval of the Federal
Energy Regulatory Commission. The completed extensions will result
in a 24-inch diameter pipeline connecting to the Destin 36-inch
mainline at a platform hub at Main Pass Block 260.
Completion of the first extension, 13 miles in length, is
scheduled for November to transport production from fields at Main
Pass Blocks 279 and 281 being developed by CNG Producing, Walter
Oil & Gas Corp., and Sonat Exploration GOM. The second extension
will continue 32 miles to Viosca Knoll Block 900 to interconnect
with production facilities for the deep-water Gemini project at
Mississippi Canyon Blocks 247, 291 and 292 being developed by
Texaco Exploration and Production and Chevron U.S.A. Gemini is
scheduled to begin production in the first half of 1999.
"These agreements to extend the Destin Pipeline reflect the high
level of development activity underway in this part of the Gulf,"
said Doug Krenz, senior vice president of Tejas Offshore Pipelines.
"We have accelerated the in-service date of Destin to relieve the
growing capacity constraints on existing transportation systems in
Destin Pipeline Co. is jointly owned by affiliates of Amoco
Corp., Sonat Inc., and Tejas Energy, an affiliate of Shell Oil.
Construction of the $460 million gas pipeline and processing plant
began in December, and initial start-up is scheduled for July. By
the middle of next year, Destin should be moving about 600 MMcf/d,
said Sonat spokesman Bruce Connery. By 2001 or 2002, the pipeline
should be full, moving 1 Bcf/d, he said. "We can definitely fill up
the pipeline with what we have right now. As far as getting a Bcf a
day, it's going to be a little ways down the road before that
In addition to the two developments served by the extensions,
Destin has received a commitment of production from a field at Main
Pass Block 226 being developed by Nippon Oil Exploration U.S.A.,
and Pogo Producing Co. These commitments are in addition to reserve
commitments to the Destin system previously announced by Amoco and
Shell. Initial production from their Amoco-operated Marlin project
is scheduled to begin in the second quarter of 1999. The Destin
Pipeline also has recently executed an agreement to receive up to
400 MMcf/d from the Viosca Knoll Gathering System at Main Pass
When completed, the Destin Pipeline will be a 255-mile system,
with a 121-mile offshore segment and a 134-mile onshore segment.
The 36-inch offshore mainline will extend 76 miles from Main Pass
Block 260 to a gas plant under construction by Amoco and Tejas at
Pascagoula, MS. Destin will continue inland interconnecting with
the Koch Gateway, Florida Gas Transmission, Transcontinental Gas
Pipeline, Tennessee Gas Pipeline, and Southern Natural Gas pipeline
The Pascagoula plant is expected to go on line with 500 MMcf/d
of capacity early next year, said Amoco spokesman John Lloyd. A
second train with another 500 MMcf/d is due to follow. A decision
has yet to be made on a third train that would boost the plant's
capacity to 1.5 Bcf/d.
"We are pleased with the producing community's response and
commitment to the Destin project, and we expect the entire Destin
Pipeline system and Pascagoula Gas Plant to be completed in early
1999," said Tim T. Scruggs, president of Amoco Pipeline. "To
accommodate the July 1998 in-service date, the gas plant will have
the capability to process liquids condensed in the pipeline. We
expect to begin delivery at that time to the Florida Gas and Koch
Gateway pipelines on the southern portion of the onshore system."
The companies would not disclose figures for the production
committed to Destin.
Joe Fisher, Houston