Enbridge Inc. announced that it will build, own, and operate crude oil and natural gas pipelines in the U.S. Gulf of Mexico for the recently sanctioned Kaskida development, operated by BP Exploration & Production Company.
The crude oil pipeline, named the Canyon Oil Pipeline System, will be a combination of 24″ and 26″ pipe with capacity of 200,000 barrels per day. It will originate in the Keathley Canyon area and deliver crude to the existing Green Canyon 19 platform, operated by Shell Pipeline Company LP for ultimate delivery to the Louisiana market.
The natural gas pipeline, named the Canyon Gathering System, will be a 12″ pipeline with capacity of 125 million cubic feet per day and will connect subsea to Enbridge’s existing Magnolia Gas Gathering Pipeline, which then delivers to Enbridge’s downstream FERC-regulated Garden Banks Gas Pipeline.
The definitive agreements are underpinned by long-term contracts which are consistent with Enbridge’s low-risk business model and provide utility-like returns. The agreements contain options which bp may elect to exercise in order to connect potential future production from its emerging Paleogene portfolio into the newly developed pipelines. Both the Canyon Oil and the Canyon Gas pipelines are being designed to accommodate connections from nearby discoveries.
Detailed design and procurement activities will commence in early 2025 with the pipelines expected to be operational by 2029. The cost of the pipelines will be approximately US$700 million.
Courtesy of Enbridge.