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New Deep Water Gulf Lines Are Off to A Slow Start
Deep-water gas from the Gulf of Mexico has begun moving ashore,but without the pressure of a cold winter or the incentive of highprices the gas stream so far has been little more than a trickle.Two projects, Discovery Gas Transmission and Nautilus Pipeline,have begun some deliveries and a third, the extension of DauphinIsland Gathering System (DIGS), is expected to start up this month.
“I think the pipeline development is pretty well on schedulefrom what it was,” said Landy Roberson, Discovery vice president.”Discovery’s up and running. Nautilus is up and flowing. Destin isgoing forward with their construction. I think the pipelines arepretty well on schedule.”
Roberson noted the “flurry” of Gulf projects is slowing downnow. “I’m currently not aware of any [new projects], but Icertainly anticipate a couple over the next few years depending onhow successful the deep-water trend is in certain areas where therecurrently is not a lot of infrastructure.”
While Roberson said he doesn’t know whether the industry canexpect a flurry of processing plant construction and expansion, hedid note the Gulf Coast region could be tight for gas processing.”It’s our perception right now that, especially in South Louisiana,there are a large number of processing plants that are at theirmaximum capability, and it is also our perception that there are atleast some prospects from the deep-water that contain much moreliquids than the Gulf of Mexico Shelf has traditionally shown,which would indicate that processing abilities will be veryimportant over the coming years.”
Discovery Gas Transmission, owned 50-50 by Texaco and MAPCO,began operation on Christmas and began deliveries to Bridgeline GasDistribution Jan. 8. “We’re delivering in the 50 to 100 MMcf/drange right now,” said John Laguens, Discovery project director.”Over the next several weeks and months, those volumes will beginto increase.” The system has capacity of 600 MMcf/d, andconstruction is essentially complete save for some minorright-of-way work onshore, Laguens said.
“The other construction that is progressing is construction ofour Larose gas processing plant.” Located at Discovery’s terminus,the cryogenic plant will have total capacity of 600 MMcf/d in two300 MMcf/d trains. Phase I of the plant, a gas dehydration andconditioning unit, began operation Feb. 22. “It’s what we call astraight refrigeration unit. What we’re doing is just dehydratingthe gas and stripping out some of the natural gas liquids. The gasleaves the plant at Larose and goes into the Bridgeline system.”
Before Phase I of the plant was up and running, Discovery gaswas being dehydrated offshore and delivered to Bridgeline. “Nowwe’re able to dehydrate onshore and remove natural gas liquids.”The Larose plant should be fully operational some time in July,Laguens said.
Most, if not all, of the Discovery gas is going to Bridgelinecustomers in Louisiana, Laguens said, although Bridgeline doesinterconnect with some interstate pipes. Another piece of theDiscovery system is a pipeline that ships residue gas from theLarose plant to an interconnection with Texas Eastern Transmissionabout five miles north. Discovery also is building a liquidsfractionation facility at Paradis, LA, about 25 miles north ofLarose. Existing and new pipelines will move NGLs to Paradis forfractionation after which they will be exported by pipeline, railcar and tanker truck. The 42,000 b/d plant is under constructionand planned to begin operation in July.
Expansion of the Dauphin Island Gathering System (DIGS) has beendelayed “a little bit” from its original start date. “Most ofthat’s due primarily to El Nino-driven winter weather problems.highwinds,” said Brad Reese, vice president of Duke Energy FieldServices. Phase I of the expansion is a 45-mile extension to beconstructed from the existing offshore system south to a point nearViosca Knoll Block 384. It connects the Main Pass system with theDauphin Island system, integrating the two systems into one. PhaseI is now expected to be in service this month with 200 MMcf/d ofnew capacity going to the beach in southern Alabama, Reese said.The joining of the two systems gives them dual outlets onshore,accessing Texas Eastern Transmission, Koch Gateway, Transco, andFlorida Gas Transmission. “For our production, that’s an idealsituation,” Reeves said. “Our producers are sitting in a premierposition because they can go to whichever market provides them thebest netback.”
Reese said Phase I capacity is currently more than 80%subscribed on a firm basis, “and we should be flowing near capacityon Phase I shortly after it’s in service. Some of that productionthat fills up that capacity comes from production that is alreadyattached, but it’s constrained. We also have some new sources thatare being connected to the system during the first and secondquarter of this year.
“Some of the new production is new wells drilled off of existingplatforms. I can’t divulge the producer information that I have.It’s just existing platform producers. and we’re connecting somenew production.”
In Phase II of DIGS, for which FERC approval was granted Feb.11, 15 miles of the system will be looped to its onshore terminusnear Mobile, AL. Additionally, a separate partnership willconstruct and own a 15-mile, 24-inch extension from the DIGSterminus south to the edge of the OCS.
To get around the lack of processing capacity on the beach inAlabama, DIGS gas is being blended with a leaner gas stream onshore already connected to the existing DIGS system. The Mobile Bayprocessing plant, composed of two 300 MMcf/d trains, should be online late this summer, Reese said.
Early last month, Williams received FERC clearance to expand itsexisting onshore Transco Mobile Bay Lateral and extend it to theoffshore Mobile Bay area. The existing 30-inch, 123-mile lateralextends from an interconnection with the Transco mainline nearButler, AL, to Compressor Station No. 82 near Coden, AL. The76-mile offshore extension will consist of about 19 miles of30-inch and 57 miles of 24-inch pipe and will have capacity of 350MMcf/d. The 30-inch line will extend from the junction platform toEast Main Pass Block 261 near the edge of the Outer ContinentalShelf. The onshore expansion will combine about 86 MMcf/d ofrelinquished capacity with 15,000 horsepower of additionalcompression at Station No. 82, and a new 15,000 horsepowerCompressor Station No. 83 in Mobile County, AL, resulting in 350MMcf/d of additional onshore capacity to match the offshoreexpansion. Construction began on the 24-inch line Feb. 10.
The Mobile Bay Lateral Phase I is targeted for service July 1and will provide 350 MMcf/d from the OCS to Station No. 82 and 214MMcf/d onshore from Station No. 82 to Transco’s mainline. Phase IIwill provide an additional 136 MMcf/d of onshore capacity inNovember. When both phases are complete, the project will transport350 MMcf/d from the OCS to Transco’s mainline and increase capacityon the existing lateral from 520 MMcf/d to 784 MMcf/d.
Construction of the Destin Pipeline is proceeding on schedule.”We are still looking at deliveries in mid-1998,” a Shell Oilspokesman said. Destin Pipeline is owned by affiliates of Shell,Amoco, and Southern Natural Gas (Sonat). Sonat is the operator.When finished, the 36-inch pipeline will be the largest in theeastern Gulf area with capacity to carry up to 1 Bcf/d. It willcome to shore at Pascagoula, MS, where Amoco and Shell will build acryogenic processing plant, expected to be fully in service inJanuary. Limited plant operations to process liquids condensed inthe pipeline will be available when Destin deliveries begin.
Destin will begin offshore at Main Pass Block 260 where ajunction platform is to be installed this spring. A portion of theonshore pipe is scheduled for completion in July, and Destin plansto deliver gas to Florida Gas Transmission and Koch GatewayPipeline. Completion of the entire 134-mile onshore pipeline isexpected in the fourth quarter. Destin plans to offer directdeliveries to Transcontinental Gas Pipe Line, Southern Natural Gas,and Tennessee Gas Pipeline.
As of press time Friday, Nautilus Pipeline remained shut in dueto a large slug of liquids being handled at the slug catcher. Theshut-in began Feb. 22. The pipeline began service in December, andprevious to the shut-in was delivering 100 to 120 MMcf/d. JoeFisher, Houston
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