El Paso Energy Partners plans large Gulf of Mexico oil pipeline system

By the OGJ Online Staff

HOUSTON, Feb. 13 -- El Paso Energy Partners LP (EPN) plans to build and operate a $450 million, 380-mile crude oil pipeline system in the US Gulf of Mexico.

Cameron Highway will deliver up to 500,000 b/d of oil from the southern Green Canyon portion of the gulf and the western Gulf of Mexico to Port Arthur and Texas City, Tex.

EPN will seek a partner or partners for up to 50% of the Cameron Highway project. It expects to fund the project through permanent project debt financing. EPN estimates that the majority of the capital outlay for the project will occur in 2003-04.

The line will be in service by the third quarter of 2004. El Paso said BP PLC, BHP Billiton, and Unocal Corp. have pledged production from Holstein, Mad Dog, and Atlantis Deepwater Trend discoveries for the pipeline project.

Cameron Highway will start at EPN's 50%-owned Ship Shoal Block 332 platform. EPN will build a 30-in. line 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 build two 24-in. pipelines, one north to Port Arthur and one northwest to Texas City.

Construction will 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, CEO 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%-owned Poseidon Oil Pipeline System to access Louisiana markets."

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