GulfTerra Energy Partners LP has signed an agreement to build and operate large gas and oil pipelines in the Gulf of Mexico for Kerr-McGee Oil & Gas Corp. The assets will provide firm gathering services from the Constitution field. Terms of the deal were not disclosed.

The 16-inch diameter gas pipeline will originate at Constitution in 5,000 feet of water in Green Canyon Blocks 679 and 680 in the Central Gulf, about 190 miles southwest of New Orleans and travel 32 miles to connections with GulfTerra’s existing Anaconda Gathering System. The new gas line will have a capacity to gather 200 MMcf/d.

The 16-inch diameter oil pipeline will bring up to 80,000 bbl/d of crude 70-miles to the Cameron Highway Oil Pipeline and Poseidon Oil Pipeline systems at the recently installed Ship Shoal 332B platform.

GulfTerra plans to install the new gathering lines in the summer of 2005, with first production scheduled for mid-2006. Kerr-McGee has dedicated production from its Constitution and Ticonderoga discoveries, as well as future potential production from several undeveloped blocks in the area, for gathering on GulfTerra’s new oil and gas pipelines.

Constitution is estimated to have proven and probable reserves of about 110 MMboe and first production is expected by mid-2006, with peak production expected to reach 40,000 bbl/d and 75 MMcf/d in 2007. The Constitution truss spar, however, will have capacity to process 40,000 bbl/d and 200 MMcf/d. The spar will be Kerr-McGee’s sixth deepwater hub.

Kerr-McGee Corp. and Noble Energy also said in April that their Ticonderoga discovery well and initial sidetrack encountered more than 250 feet of net high-quality hydrocarbon pay, primarily oil, in three zones. The owners estimate that Ticonderoga, located on Green Canyon Block 768 in 5,250 feet of water, offers potential resources of 30-50 million boe.

GulfTerra said that the Constitution platform will become the third deepwater hub that will be connected to its Anaconda Gathering System along with the Marco Polo and Typhoon tension leg platforms. Anaconda currently gathers production from the Typhoon and Boris fields and will also gather production from the Marco Polo, K2, K2 North, Constitution and Ticonderoga fields.

“Development of the Constitution oil and gas export pipelines expands our presence in the active Green Canyon area of the Gulf of Mexico,” said GulfTerra Chairman Robert G. Phillips. “It is our second deepwater trend project designed to gather production for Kerr-McGee, a premier independent exploration and production company, and exemplifies GulfTerra’s commitment to serve producers in the Gulf of Mexico through the construction of new midstream infrastructure.”

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