Leviathan Gas Pipeline Co., Houston, has advanced plans for a large deepwater pipeline gathering system in the Gulf of Mexico.
Under an agreement between DeepTech International Inc. and Transco Energy Co., Leviathan will pay $65 million for Transco interests in several gulf gas gathering pipelines and related facilities. Leviathan is a DeepTech subsidiary.
Gulf pipeline assets Leviathan acquired from Transco include Louisiana Offshore Pipeline Systems (LOPS), Green Canyon Pipeline Co., and companies owning a 40% interest in High Island Offshore System (HIOS) and a 33-1/3% interest in United Texas Offshore System (UTOS).
The transaction pushes Transco past its goal in a strategic and financial restructuring plan to sell $100 million in nonessential assets. Combined with other completed and pending deals, Transco's asset sales total $115 million since the restructuring plan was disclosed last October.
DEEPWATER HEADER
DeepTech Chairman Tom Tatham said Leviathan's planned $80 million Deepwater Header System (DHS) will move pipeline transmission facilities closer to the Flexure trend and other deepwater areas in the Gulf of Mexico. The cost figure does not include an undetermined number of staging platforms.
"The system will provide deepwater producers with access to long line oil and gas transportation systems serving multiple markets," Tatham said.
Leviathan plans to lay 80 miles of parallel 12 in. and 16 in. lines from Green Canyon Pipeline on South Marsh Island South Addition Block 205 to Stingray Pipeline on East Cameron South Addition Block 338.
Acquisition of Transco's gulf pipelines and construction of the 80 mile link will allow Leviathan to provide transmission services to deepwater producers in the East Breaks, Garden Banks, and Green Canyon areas.
Leviathan and Natural Gas Pipeline Co. of America (NGPL) are 50-50 owners of Stingray, a 300 mile, 1.2 bcfd line serving, East and West Cameron areas.
TRANSCO RESTRUCTURING
Chairman and Pres. John P. DesBarres said Transco's asset sales have been accomplished on schedule. He said the company's strategic and financial realignment will help revitalize earnings, reduce interest expense, and better position Transco to expand remaining core businesses.
In addition to marketing its offshore assets, Transco in the past 5 months has settled its last significant take or pay litigation, modified bank credit agreements, and filed a registration statement to sell $300 million of Transco notes.
Transco plans to use proceeds from sale of its gulf pipelines to retire debt.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
