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Destin Stretching System To Reach Production

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 &amp 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 the area."

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 happens."

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 Block 260.

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 systems.

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

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