Although it is yet to be finished, the Destin Pipeline alreadyis growing, with plans for two extensions to its system in theeastern Gulf of Mexico production area. Destin Pipeline Co. lastweek announced two contiguous extensions, with a total estimatedcost of $52 million, will serve two development projects thatrecently dedicated production to the 1 Bcf/d Destin.

Construction of the two extensions, totaling 45 miles, isexpected to begin in September, pending approval of the FederalEnergy Regulatory Commission. The completed extensions will resultin a 24-inch diameter pipeline connecting to the Destin 36-inchmainline at a platform hub at Main Pass Block 260.

Completion of the first extension, 13 miles in length, isscheduled for November to transport production from fields at MainPass Blocks 279 and 281 being developed by CNG Producing, WalterOil &amp Gas Corp., and Sonat Exploration GOM. The second extensionwill continue 32 miles to Viosca Knoll Block 900 to interconnectwith production facilities for the deep-water Gemini project atMississippi Canyon Blocks 247, 291 and 292 being developed byTexaco Exploration and Production and Chevron U.S.A. Gemini isscheduled to begin production in the first half of 1999.

“These agreements to extend the Destin Pipeline reflect the highlevel 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 thegrowing capacity constraints on existing transportation systems inthe area.”

Destin Pipeline Co. is jointly owned by affiliates of AmocoCorp., Sonat Inc., and Tejas Energy, an affiliate of Shell Oil.Construction of the $460 million gas pipeline and processing plantbegan in December, and initial start-up is scheduled for July. Bythe middle of next year, Destin should be moving about 600 MMcf/d,said Sonat spokesman Bruce Connery. By 2001 or 2002, the pipelineshould be full, moving 1 Bcf/d, he said. “We can definitely fill upthe pipeline with what we have right now. As far as getting a Bcf aday, it’s going to be a little ways down the road before thathappens.”

In addition to the two developments served by the extensions,Destin has received a commitment of production from a field at MainPass Block 226 being developed by Nippon Oil Exploration U.S.A.,and Pogo Producing Co. These commitments are in addition to reservecommitments to the Destin system previously announced by Amoco andShell. Initial production from their Amoco-operated Marlin projectis scheduled to begin in the second quarter of 1999. The DestinPipeline also has recently executed an agreement to receive up to400 MMcf/d from the Viosca Knoll Gathering System at Main PassBlock 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 PassBlock 260 to a gas plant under construction by Amoco and Tejas atPascagoula, MS. Destin will continue inland interconnecting withthe Koch Gateway, Florida Gas Transmission, Transcontinental GasPipeline, Tennessee Gas Pipeline, and Southern Natural Gas pipelinesystems.

The Pascagoula plant is expected to go on line with 500 MMcf/dof capacity early next year, said Amoco spokesman John Lloyd. Asecond train with another 500 MMcf/d is due to follow. A decisionhas yet to be made on a third train that would boost the plant’scapacity to 1.5 Bcf/d.

“We are pleased with the producing community’s response andcommitment to the Destin project, and we expect the entire DestinPipeline system and Pascagoula Gas Plant to be completed in early1999,” said Tim T. Scruggs, president of Amoco Pipeline. “Toaccommodate the July 1998 in-service date, the gas plant will havethe capability to process liquids condensed in the pipeline. Weexpect to begin delivery at that time to the Florida Gas and KochGateway pipelines on the southern portion of the onshore system.” The companies would not disclose figures for the productioncommitted to Destin.

Joe Fisher, Houston

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