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Enterprise Receives Initial Deepwater Gas, Oil Flows in Constitution Pipeline

Enterprise Products Partners LP said last week that 30 MMcf/d of new gas production and 32,000 bbl/d of oil started flowing into its Constitution oil and natural gas pipelines from Kerr-McGee's Constitution field and Kerr-McGee and Noble Energy's Ticonderoga field in the south Green Canyon area of the deepwater Gulf of Mexico.

Current production is coming from two Ticonderoga wells and one Constitution well. Five additional wells are expected to begin flowing from Constitution in 2006. Construction of the pipelines was completed in late 2005.

The Constitution oil and natural gas pipelines are located in 5,000 feet of water in the central Gulf and are designed to provide gathering services for the two fields, as well as other undeveloped blocks in the south Green Canyon area. The 32-mile, 16-inch diameter gas pipeline has the capacity to transport up to 200 MMcf/d to Enterprise's existing Anaconda Gathering System, which gathers gas production from the Marco Polo area and delivers it to El Paso Corp.'s ANR Pipeline. The crude oil export pipeline is a 70-mile, 16-inch diameter line with a capacity of 100,000 bbl/d. It connects the fields with the Cameron Highway Oil Pipeline and Poseidon Oil Pipeline systems at Cameron Highway's Ship Shoal 332B junction platform.

At the current volumes, Enterprise said the Constitution oil and gas pipelines and its interest in the Cameron and Poseidon systems will generate $22 million in annualized gross operating margin, ramping up to $48 million by the end of 2006 based on volumetric expectations.

"Completion of the Constitution Oil and Gas Pipeline project extends the reach of our integrated value chain and provides flexible export solutions for producers developing the prolific south Green Canyon area," said Enterprise CEO Robert G. Phillips.

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