Shell Gas Transmission LLC. and the operating partnership of Enterprise Products Partners LP announced plans last Tuesday to construct and install a $40 million natural gas pipeline in the western Gulf of Mexico. The new 41-mile, 16-inch pipeline is expected to be ready to transport gas production beginning as early as November 2003 from the deepwater Gunnison development operated by Kerr-McGee Oil & Gas Corp.

The pipeline will be owned by Triton Gathering LLC. (Triton), which owns gas gathering lines that connect to the Stingray Pipeline Co. LLC. system. Triton and Stingray are both jointly owned by Shell and Enterprise. The new Triton pipeline will have a capacity of 275 MMcf/d and will connect into Stingray. The new pipeline’s capacity will be sufficient to accommodate Gunnison production plus additional volumes from future developments in the area.

“This extension to our Triton system represents an important expansion of the gas transportation infrastructure in the western Garden Banks corridor,” said Doug Krenz, Shell Gas Transmission president. “By serving Gunnison, the first discovery in this area, we are solidifying the positions of Triton and Stingray as leaders in Western Gulf.”

The Gunnison discovery is located at Garden Banks Block 667, 668 and 669 in 3,150 feet of water. Kerr-McGee owns a 50% working interest and is the operator; Nexen Petroleum Offshore USA Inc. (30%) and Energy Resource Technology Inc., a subsidiary of Cal Dive International Inc. (20%), own the remaining interest. Kerr-McGee is developing Gunnison with a truss spar platform, which can serve as a hub for future development and third-party production.

Shell Gas owns or has a significant interest in the largest network of natural gas transmission and gathering systems serving the deepwater Gulf of Mexico. Enterprise Products Partners is the second-largest publicly traded midstream energy partnership, with an enterprise value of approximately $6 billion.

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