Enbridge (TSX:ENB,NYSE:ENB) has introduced plans to assemble and function new crude oil and pure gasoline pipelines within the US Gulf of Mexico to assist BP’s (LSE:BP) lately sanctioned Kaskida deepwater growth.
The crude oil pipeline, known as the Canyon Oil Pipeline System, will encompass 24-inch and 26-inch diameter pipes with a capability of 200,000 barrels per day. It can originate from the Keathley Canyon space and transport crude oil to Shell Pipeline Firm LP’s Inexperienced Canyon 19 platform.
From there, the oil will likely be additional delivered to the Louisiana market, positioning Enbridge as a key participant in transporting crude from deepwater fields to the US mainland.
Along with the oil pipeline, Enbridge may also assemble a pure gasoline pipeline referred to as the Canyon Gathering System. This 12-inch pipeline may have the capability to deal with 125 million cubic ft of gasoline per day.
The Canyon Gathering System will join subsea to Enbridge’s current Magnolia Fuel Gathering Pipeline, which is able to then transport the gasoline to Enbridge’s downstream Backyard Banks Fuel Pipeline, a Federal Vitality Regulatory Fee (FERC)-regulated pipeline system.
This pipeline will assist make sure the environment friendly supply of pure gasoline from the deepwater subject to markets onshore.
The Kaskida challenge, BP’s sixth operated hub within the US Gulf of Mexico, has a manufacturing capability of 80,000 barrels of oil per day from its preliminary part of six wells.
Positioned 250 miles southwest of New Orleans within the Keathley Canyon space, Kaskida faucets into roughly 275 million barrels of recoverable oil equal, with potential for extra growth phases primarily based on additional evaluations.
Moreover, the challenge additionally performs a vital function in unlocking the potential of as much as 10 billion barrels of found sources inside the broader Kaskida and Tiber catchment areas. The hub will make the most of superior 20K drilling know-how to develop high-pressure reservoirs in furtherance of deepwater oil extraction efforts.
Enbridge’s agreements with BP are supported by long-term contracts and embrace provisions that might enable BP to probably join future discoveries in its Paleogene portfolio to the brand new pipeline programs.
The brand new pipelines will likely be designed to accommodate further connections from different close by oil and gasoline fields, permitting for potential future enlargement.
Enbridge plans to start detailed design work and procurement actions in early 2025, with the pipelines anticipated to grow to be operational by 2029. The full value of the challenge is estimated at round US$700 million.
The corporate sees this enlargement as a part of Enbridge’s broader technique to diversify its offshore enterprise.
“The Canyon Oil and Fuel pipelines provide a pretty alternative for Enbridge to serve prospects within the Gulf of Mexico and additional broaden our US Gulf Coast footprint,” stated Cynthia Hansen, Enbridge’s government vice chairman and president of gasoline transmission and midstream.
“The agreements generate steady and predictable money circulation and supply future progress alternatives,” she added.
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Securities Disclosure: I, Giann Liguid, maintain no direct funding curiosity in any firm talked about on this article.