Williams said its Devils Tower platform and pipeline facilities in the Gulf of Mexico will require an investment of more than $400 million and will be in service by mid-2003. The floating production facility will be able to handle up to 60,000 b/d of oil. The Mountaineer pipeline will have a capacity of 150,000 b/d of oil, and the proposed Canyon Chief pipeline will have a capacity of 350 MMcf/d of gas.
Williams is building the facilities for the new Devils Tower field, which is being developed by Dominion Exploration and Pioneer Resources about 140 miles southeast of New Orleans at Mississippi Canyon Block 773 in 5,610 feet of water. The floating production facility will be the world’s deepest dry tree platform.
“The Devils Tower project is another major step in helping Williams continue to build its shareholder value,” said Steven J. Malcolm, executive vice president of Williams and CEO of Williams’ energy services unit. “The project significantly expands our productive capacity through new assets. It also optimizes the use of our existing assets and extends our geographic footprint in a very prolific area in the Gulf of Mexico.”
The company signed an agreement last month to build the platform and pipeline to the Mobile Bay area for Dominion and Pioneer (see NGI, Sept. 10). Williams will own the facilities and operate them for the producers for a fixed fee. Williams said it will receive fixed payments for its services through 2011. The payments will begin upon facility commissioning and will provide more than 50% of the anticipated revenue for the first five years of the project.
Under the agreement, Williams energy marketing and trading group will directly purchase the associated gas produced. Dominion will market the oil production.
The Mountaineer oil pipeline will include six miles of 14-inch diameter and 70 miles of 18-inch diameter deepwater pipeline and 50 miles of 20-inch shallow-water pipeline. Mountaineer will transport crude from the deepwater platform to an onshore oil terminal. The Canyon Chief gas pipeline will include six miles of 14-inch and 90 miles of 18-inch diameter deepwater pipeline and will carry raw gas to the Mobile Bay lateral owned by Transco, a unit of Williams. Transco will move the product to Williams’ Mobile Bay gas processing plant.
The natural gas liquids will then be shipped to Williams’ Baton Rouge fractionator and other downstream markets on the Tri-States and Wilprise pipelines, which are operated and partly owned by Williams. The natural gas will be available for delivery to Southeast markets through area pipelines, including Transco and the Gulf Stream Natural Gas System, a joint interstate pipeline development of Williams and Duke Energy that will extend across the Gulf to near Tampa, FL.
“Devils Tower will allow Williams to better manage and more fully utilize all of its value chain assets and businesses associated with this project,” Malcolm said. “This project is a total Williams solution that involves marketing and trading, our midstream facilities and our gas pipeline systems. Devils Tower will also help Williams achieve its deepwater goal of investing in assets capable of serving multiple fields, like our previously announced East Breaks project.”
By using the floating production facility and export pipelines as a hub, Williams plans to market transportation and production services to producers developing other fields in the Mississippi Canyon. Producers will be able to tieback to the Devils Tower facilities to ship their oil and gas to shore without the expense of building their own production and pipeline systems.
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