By MELODIE WARNER
Enterprise Products Partners and Genesis Energy plan to build a crude oil gathering pipeline in the deepwater Gulf of Mexico for a consortium of six producers.
The midstream energy companies formed Southeast Keathley Canyon Pipeline Co., a 50/50 joint venture that will construct and own the 149-mile pipeline with a planned capacity of 115,000 bpd.
Enterprise will serve as construction manager and operator of the new pipeline, earning fees for both services.
The SEKCO oil pipeline is expected to begin service by mid-2014, and will connect the Lucius-truss spar floating production platform to an existing junction platform at South Marsh Island 205 that is part of the Enterprise-operated Poseidon pipeline system.
The Poseidon is a 367-mile pipeline capable of delivering about 400,000 barrels of crude oil a day from central and western offshore Gulf of Mexico to onshore and offshore Louisiana.
The Lucius production area is estimated to have more than 300 million barrels of oil equivalent.
Enterprise and Genesis said they have crude oil transportation agreements with a producer group comprised of Anadarko US Offshore Corp., Apache Deepwater Development, ExxonMobil Corp., Eni Petroleum US, Petrobras America, and Plains Offshore Operations.
Enterprise has seen results soar in recent quarters, helped in part by its $3.3 billion merger with Teppco Partners in late 2009, which created one of the largest pipeline companies in the US.
The company said in May it had $5 billion worth of expansion projects slated for upcoming years as it seeks to take advantage of growing US onshore oil and gas production.
Meanwhile, Genesis agreed in October to acquire interests in three Gulf of Mexico crude-oil pipeline systems from Marathon Oil in a deal valued at $205.8 million.
The transaction would give it a 28% stake in Poseidon Oil Pipeline Co., a 29% interest in Odyssey Pipeline and 23% of the Eugene Island Pipeline System.
Shares of Enterprise and Genesis closed Tuesday at $46.67 and $27.87, respectively. Both stocks were inactive premarket.
Dow Jones Newswires