U.S. gulf-related gas processing to expand

Aug. 4, 1997
Natural gas processing capacity is ramping up along the U.S. Gulf Coast to serve growing Gulf of Mexico area gas production. Units of Amoco Corp. and Shell Oil Co. signed definitive agreements to build a cryogenic gas processing plant near Pascagoula, Miss., to handle gas volumes from eastern gulf producing areas. Amoco will own 60%, Shell 40%. The plant will be built and operated by Amoco's natural gas liquids business unit. Shell's Gulf of Mexico natural gas pipelines and Gulf Coast

Natural gas processing capacity is ramping up along the U.S. Gulf Coast to serve growing Gulf of Mexico area gas production.

Units of Amoco Corp. and Shell Oil Co. signed definitive agreements to build a cryogenic gas processing plant near Pascagoula, Miss., to handle gas volumes from eastern gulf producing areas.

Amoco will own 60%, Shell 40%. The plant will be built and operated by Amoco's natural gas liquids business unit.

Shell's Gulf of Mexico natural gas pipelines and Gulf Coast gas plants are affiliated with its Shell Midstream Enterprises business unit.

Meanwhile, Williams Energy Group, a unit of Tulsa's Williams Cos. Inc., has signed an agreement with SOCO Offshore Inc., a unit of Snyder Oil Corp., Fort Worth, covering a volume commitment and justifying processing plant construction near Coden, in southwestern Alabama.

Amoco-Shell deal

The Amoco-Shell plant will have a processing capacity of 1 bcfd of gas. Cost of the plant is in excess of $100 million.

Pending timely receipt of permits, construction should begin during the fourth quarter.

The plant will be connected to the Destin Pipeline, an offshore line to be jointly owned by Amoco, Shell, and Southern Natural Gas Co.

Amoco and Shell both have joint and separate deepwater gulf projects in areas south of Pascagoula.

The Destin Pipeline will bring gas to the plant, which will offer processing service to shippers on the Destin line. Shell and Amoco have already committed to more than 60% of the planned line capacity.

The plant is being designed with two processing trains, each capable of handling 500 MMcfd.

Limited operations are scheduled to begin in July 1998 to process liquids condensed in the Destin Pipeline, with full gas processing capability commencing in January 1999.

The plant will be designed to be expanded to process as much as 1.6 bcfd.

Bechtel Corp. is designing and building the plant.

The Williams project

The Williams deal anchors construction of facilities to gather and process 350 MMcfd of gas near the Outer Continental Shelf, Williams said.

Two Williams Energy units and Williams' Transcontinenal Gas Pipe Line will purchase, gather, process, and transport the gas.

The facilities will include a 600 MMcfd processing plant to be built near Coden.

Williams said existing Mobile Bay area production, coupled with the new commitment from SOCO, "will more than adequately supply this plant, which is scheduled for service in January 1999."

SOCO has signed a life-of-reserves agreement for Williams Energy's Field Services unit to gather and process SOCO's output from 11 blocks in the eastern gulf.

Williams Energy's Merchant Services unit will purchase and market the associated volumes. The unit operates as Williams Energy Services Co.

Existing deliverability from the blocks totals about 160 MMcfd.

New production associated with 100% of the interest from one block, East Main Pass 261, is expected to incrementally add up to 140 MMcfd by mid-1998.

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