El Paso Energy Partners to build major Gulf of Mexico oil pipeline
The following news release was issued by El Paso Energy Partners
HOUSTON, Feb. 13 -- El Paso Energy Partners, L.P. (NYSE: EPN) announced today that it will build and operate the Cameron Highway Oil Pipeline System, a major new 380-mile oil pipeline in the Gulf of Mexico. Cameron Highway will deliver up to 500,000 barrels of oil per day from the southern Green Canyon and western Gulf of Mexico areas to Port Arthur and Texas City, Texas. The new pipeline is expected to be in service by the third quarter of 2004, establishing an important new oil supply source for the Texas Gulf Coast area.
EPN has entered into agreements with operating subsidiaries of BP p.l.c. (NYSE: BP), BHP Billiton (NYSE: BHP; Australia), and Unocal (NYSE: UCL) under which BP, BHP Billiton, and Unocal have dedicated production from the Holstein, Mad Dog, and Atlantis Deepwater Trend discoveries for transportation on Cameron Highway.
Cameron Highway will originate at EPN's 50-percent-owned Ship Shoal 332 platform. EPN will build a 30-inch diameter pipeline to one of its platforms in the western Gulf of Mexico and extend it to the High Island Addition area. From High Island, EPN will construct two 24-inch pipelines-one extending north to Port Arthur, Texas and one northwest to Texas City, Texas. Construction is scheduled to begin in the spring of 2002. An interconnect at the Ship Shoal 332 platform to the EPN-operated Poseidon Oil Pipeline system will provide an alternative route to Louisiana oil markets for production that is not dedicated to Cameron Highway.
"Cameron Highway will be strategically positioned to serve the many Green Canyon area prospects currently under development as well as meeting the oil disposition needs of producers in the central and western Gulf of Mexico," said Robert G. Phillips, chief executive officer of El Paso Energy Partners. "Through Cameron Highway producers can access the major Texas oil market areas of Port Arthur and Texas City, providing an alternative to the oil markets in southern Louisiana. Production that is not dedicated to Cameron Highway can also utilize our 36-percent owned Poseidon Oil Pipeline System to access Louisiana markets. Our existing Gulf of Mexico infrastructure, together with the significant new projects we have announced in recent months, position EPN as a leader in the construction and operation of offshore pipelines and platforms."
EPN will seek a partner or partners for up to 50 percent of the $450-million Cameron Highway pipeline and expects to fund the project through permanent project debt financing, which would provide a significant portion of Cameron Highway's capital requirements on a non-recourse basis. EPN estimates that the majority of the capital outlay for the project will occur in 2003 and 2004.
"We expect considerable potential partner interest in forming a joint venture to construct, install, and own Cameron Highway Oil Pipeline," Phillips said. "Additionally, as operator of Cameron Highway, EPN will benefit from bringing in an established partner that provides enhanced benefits and services to our customers in the central and western Gulf of Mexico."
El Paso Energy Partners is continuing to expand its asset base in the Gulf of Mexico and is actively working with producers to meet the growing demand for transportation infrastructure and production services arising from the many significant discoveries under development in the Deepwater Trend. Since late 1999, El Paso Energy Partners has completed a number of Deepwater projects, including the Allegheny Oil Pipeline and the East Breaks Gathering System, the world's deepest natural gas pipeline. EPN operates the Poseidon Oil Pipeline System, which serves the Deepwater Trend in the central Gulf of Mexico and constructed oil and gas export pipelines for the Typhoon Field. EPN successfully installed the Prince Tension Leg Platform and related oil and gas export pipelines during 2001 and has recently announced projects to construct a natural gas pipeline for the Medusa discovery and a platform and pipelines at the Marco Polo discovery, as well as to provide gas transportation services for the Matterhorn discovery. El Paso Energy Partners, L.P. is a publicly owned master limited partnership. The partnership owns and operates a diversified set of midstream assets, including five offshore natural gas and oil pipelines and six production handling platforms located in the Gulf of Mexico. In addition, the partnership owns and operates a strategically located salt dome storage facility with 7.2 billion cubic feet of current storage capacity in Mississippi, a 450-mile coal bed methane gathering system in Alabama, more than 600 miles of natural gas liquids gathering and transportation pipelines and three fractionation plants located in south Texas, and a 700-thousand dekatherm per day cryogenic gas processing facility in the San Juan Basin of New Mexico.
This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The partnership has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. While the partnership makes these statements and projections in good faith, neither the partnership nor its management can guarantee that the anticipated future results will be achieved. Reference should be made to the partnership's (and its affiliates') Securities and Exchange Commission filings for additional important factors that may affect actual results.
Updated: February 2002