Enterprise, Shell Grab Pipe Spinoffs
Enterprise Products Partners L.P. reported early last week that
its operating subsidiary has acquired ownership interests in five
natural gas pipeline systems and related assets in the central Gulf
of Mexico from El Paso Energy Partners, L.P. for $112 million in
cash. The El Paso unit was forced to sell the assets as part of the
Federal Trade Commission's approval of the El Paso Energy/Coastal
Corp. merger, which was completed last Monday.
The five systems have 725 miles of pipeline with a combined
capacity of 2.85 Bcf/d of gas. Included in the purchase, Enterprise
received Sailfish Pipeline L.L.C. and Moray Pipeline L.L.C.
Sailfish owns a 25.67% interest in the Manta Ray Offshore Gathering
Co., L.L.C. as well as the Nautilus Pipeline Co. L.L.C. Moray owns
a 33.92% interest in Nemo Gathering Co. L.L.C.
Both the Manta Ray and Nautilus Pipeline systems are jointly
owned with Shell Gas Transmission (SGT) and Marathon Gas
Transmission. Manta Ray is comprised of 225 miles of unregulated
natural gas pipelines with a capacity of 750 MMcf/d, while Nautilus
is a 101-mile regulated line with a capacity of 600 MMcf/d. The
Nemo joint project with SGT is a 24-mile gas pipeline, which
connects Shell's Brutus and Glider deepwater projects to the Manta
Ray gathering system. Nemo is expected to be complete during the
fourth quarter 2001.
"This transaction significantly expands our natural gas pipeline
base of assets to include some of the most attractive pipelines in
the central Gulf and integrates well with our onshore natural gas
liquid system and the Acadian Gas system," stated O.S. "Dub"
Andras, CEO of Enterprise.
"These pipeline systems are each strategically located in the
Gulf to link many of the new, highly prolific deepwater
developments to a number of onshore interstate and intrastate
pipeline systems that serve multiple end use markets throughout the
Enterprise and SGT also teamed up to form Starfish Pipeline Co.
L.L.C., which acquired Stingray Pipeline Co. L.L.C. and West
Cameron dehydration Co., L.L.C. from an affiliate of El Paso Energy
Partners. The ownership of Starfish is 50-50, but SGT will serve as
the operator and commercial manager of the assets. Stingray is a
325-mile pipeline that transports natural gas and injected
condensate from about 53 fields in the High Island, West Cameron,
East Cameron, Vermilion and Garden Banks areas to onshore
interstate and intrastate pipelines in Cameron Parish, LA.
Shell Gas Transmission said the addition of the Stingray
pipeline, with a capacity of 1.2 Bcf/d, will boost the pipeline
capacity under its commercial management to about 7.1 Bcf/d.
"Purchase of the Stingray pipeline and its related onshore
dehydration facility supports our strategy to be positioned to
provide the necessary pipeline infrastructure to support increased
Gulf of Mexico deepwater natural gas production," said Doug Krenz,
president of SGT. "Shell Gas Transmission is well positioned to
provide natural gas transport services to producers in all major
Gulf of Mexico production areas, particularly the highly prolific
The West Cameron dehydration facility has a capacity of 950
MMcf/d and is located at an onshore terminus of Stingray. Also
included in the transaction are 17 laterals spanning approximately
53 miles that are attached to Stingray, which are in the process of
being acquired from Natural Gas Pipeline Company of America.
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