With installation of the Independence Hub production platform in the deepwater of the eastern Gulf of Mexico (GOM) now complete, Enterprise Products Partners LP said Thursday it is transferring control to Anadarko Petroleum Corp. as platform operator. The hub, expected to ramp up in the second half of 2007, will be capable of handling up to 1 Bcf/d, which would represent more than a 10% increase in gas deliveries from the GOM (see Daily GPI, Jan. 30).
The hub is located in the Mississippi Canyon about 150 miles southeast of Venice, LA, in more than 8,000 feet of water, making it the world's deepest offshore platform. It is 80% owned by Enterprise, with Helix Energy Solutions Group Inc. holding a 20% stake. Once the hub begins operations, it will initially process and transport gas for a group of producers developing 10 gas fields in the deepwater.
"The installation of the Independence Hub marks a major milestone in one of the most significant offshore projects ever developed," said Enterprise CEO Robert G. Phillips. "Credit for this outstanding achievement goes to our employees, customers, contractors and service companies who were clearly up to the challenge and worked together to complete the project. Besides the financial benefits of the project, those involved in this initiative can take satisfaction in knowing they made a significant contribution to securing an important source of domestic energy."
The producer group is now in the process of installing flowline risers, which will transport production from the subsea wellheads to the hub, and Enterprise is installing the export pipeline riser that will transport natural gas from the platform to the 134-mile Independence Trail pipeline, which was installed in August 2006. Independence Trail will transport up to 1 Bcf/d of natural gas from the hub to the partnership's West Delta 68 platform, which connects to a third party pipeline to deliver the gas onshore into Louisiana.
Enterprise said that with the installation of the hub complete, it will begin to earn monthly demand revenues from the hub. The platform will earn annual fixed-demand fees estimated at $55 million ($44 million to Enterprise; $11 million to Helix). In addition to the demand fees, the platform and the associated gas pipeline, which is 100%-owned by Enterprise, are expected to generate net incremental gross operating margin of about $17 million a year from volumetric fees for each 100 MMcf/d of production. Once production begins, Enterprise also will begin earning volumetric fees from the platform and the pipeline.
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