Enbridge, Chevron Plan $500 Million Gulf Of Mexico Pipeline Expansion

September 2009 Vol. 236 No. 9

Enbridge Inc. has entered into Letters of Intent with Chevron USA, Inc. which could result in the expansion of its central Gulf of Mexico offshore pipeline system.

Enbridge proposes to construct, own and operate the Walker Ridge Gathering System (WRGS) to provide natural gas gathering services to the potential Jack, St. Malo and Big Foot ultra deepwater developments. The estimated cost of the WRGS is $500 million, subject to finalization of scope and definitive cost estimates.

As proposed, the WRGS is expected to include 190 miles of 8-inch,10-inch and/or 12-inch pipeline at depths of up to 7,000 feet and will have a capacity of 100 MMcf/d.

Patrick D. Daniel, president/CEO, Enbridge Inc. said, “The Gulf of Mexico has long been a major producing region for North American oil and gas, and there is a significant trend toward ultra deepwater developments in the Gulf of Mexico. The Walker Ridge Gathering System will tie in a new supply source for Enbridge’s Manta Ray and Nautilus offshore pipeline systems, enhancing Enbridge’s existing offshore pipeline business and establishing a strategic base for future growth opportunities in the ultra-deep Gulf of Mexico. In addition, the development of the gathering system represents an attractive investment opportunity itself, with risk and return characteristics comparable to Enbridge’s normal business model.”