CNG JOINS GULF DEEPWATER GAS PROJECT

CNG Producing Co., New Orleans, has joined a group of companies led by Shell Offshore Inc. to develop the deepwater Popeye gas reservoir on Green Canyon Block 116 Unit in the Gulf of Mexico.

Popeye will be the deepest water gas field development to date in the Gulf of Mexico, CNG and Shell said.

Under an agreement disclosed last week, CNG will acquire half of operator Shell's 75% interest in Popeye by participating in development of the field, which lies 2,000 ft of water about 140 miles south of New Orleans.

Phase 1 development is to begin this year and continue into 1995, when production is to begin.

Shell said work this year will consist mostly of planning and design. Tentative plans include drilling two wells beginning in 1994, but a drilling con-tractor has not been chosen.

CNG expects its share of spending to be about $60 million during the first phase of development, with most out- lays occurring after 1993.

CNG Producing Pres. David Hunt said participating in Popeye is extremely significant for the company.

"At a time when many industry players are moving their investments into international ventures, CNG Producing remains dedicated to the belief that the U.S. gas business presents very attractive long term business opportunities," Hunt said.

Shell discovered Popeye in 1985 and has drilled eight delineation wells.

Popeye partners expect to produce Popeye gas through subsea wellheads and production manifolds, with gathering lines tied back to an existing platform. But they neither have committed to a final development plan nor decided where Popeye production is to be routed.

In addition to the 37.5% interests in Popeye held by operator Shell Offshore and CNG Producing, Mobil Exploration & Producing Southeast Inc. and British Petroleum each own 12.5% interests.

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