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Williams to Handle Production Capacity from Deep-Water Giant

Williams to Handle Production Capacity from Deep-Water Giant

Williams was selected last week by a consortium of deep-water Gulf of Mexico producers to handle about 500 MMcf/d of gas production that is scheduled to come on stream in mid-2002. To accommodate the projected volumes, Williams will build, operate and own the Canyon Station, a production handling platform in the East Main Pass area south of Mobile Bay.

"This is the third major agreement we've signed this year to bring new supplies of natural gas production into our Mobile Bay operations," said Alan Armstrong, vice president of gathering and processing in Williams' midstream unit. The Williams platform will process gas from the proposed Canyon Express gathering system, which will bring gas on a dual 12-inch pipes from three production fields.

The fields, which are located in 6,700 to 7,300 feet of water will set a record for the deepest production ever, dethroning Shell's Mensa field in 5,300 feet of water, the current record-holder.

Williams' Canyon Station platform also will be connected to three pipeline outlets that deliver the residue gas onshore, giving the producers access to a variety of markets. A spokesman for Williams said that it was currently in the middle of negotiating connection agreements with three onshore pipelines, but declined to specify names until the deals are in place. Williams said connecting to three different outlets would give the producers access to a variety of markets. Canyon Station will be built approximately 55 miles north of Camden Hills in the East Main Pass area and is slated to begin during the summer of 2001, and will conclude sometime in the second quarter of 2002.

The leases being developed are the Marathon-operated Camden Hills, BP-operated Kings Peak and Elf Exploration-operated Aconcagua fields in the eastern Gulf of Mexico, located in 6,700 to 7,300 feet of water south of Alabama's Mobile Bay, near Coden. The production project is being developed and managed by the Canyon Express producers, a consortium of Elf Exploration, Mariner Energy, Pioneer Natural Resources, BP Amoco, Marathon Oil and Total Exploration. Upon completion, Elf will be the operator of the Canyon Express Pipeline subsea production system.

Pioneer stands to own an 18% share of the Canyon Express system pending the closure of its previously announced $23 million acquisition of Baker Hughes Inc.'s 33.3% interest in the Camden Hills field (see NGI, Oct. 30).

Alex Steis

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