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Press Release
Date 20 February 2002
BHP BILLITON TO INVEST IN GULF OF MEXICO TRANSPORTATION SYSTEM
BHP Billiton today announced that it would take equity ownership in two
limited liability companies that will transport hydrocarbons from the
Group's recently sanctioned Mad Dog oil and gas development and its Atlantis
discovery, both in the ultra-deepwater Gulf of Mexico.
The pipelines are part of a new system being built in the southern Green
Canyon area that will also transport hydrocarbons from the BP-operated
Holstein development, and potentially other fields in the area.
BHP Billiton will acquire a 25 per cent interest in the new Caesar oil
pipeline (28-inch diameter) and a 22 per cent interest in the Cleopatra gas
pipeline (20-inch diameter). Capital costs for the development are expected
to be about US$100 million (BHP Billiton share).
The Caesar pipeline will have a design capacity of at least 450,000 barrels
of oil per day (bopd), and Cleopatra will have a capacity of 500 million
standard cubic feet of gas per day (mmscfd).
The pipelines will be about 120 miles long, including laterals, and are the
first of their size to be laid in water depths greater than 5,000 feet in
the Gulf of Mexico. Both will be installed on a parallel timeframe with the
Mad Dog and Holstein field developments and commissioning is expected in
2004.
President and CEO BHP Billiton Petroleum Philip Aiken said: "This investment
provides BHP Billiton with equity participation in a strategically and
commercially important infrastructure project that will serve the southern
Green Canyon area where significant discoveries have been made by BHP
Billiton, BP, Shell and Unocal, as well as other third parties."
The equity ownership enables BHP Billiton to secure transportation
arrangements for Mad Dog, Atlantis and future proximal discoveries. In
addition, the arrangements provide BHP Billiton with the opportunity to
capture additional value from the transportation of third-party volumes
resulting from industry exploration and development activity in the area.
As part of the agreement BHP Billiton will utilise the infrastructure to
transport its 23.9 per cent equity share of the hydrocarbons from the Mad
Dog development (gross reserves 200-450 million barrels of oil equivalent,
mmboe) and its 44 per cent equity share of the hydrocarbons from the
Atlantis discovery (gross reserves 400-800 mmboe), which is scheduled for
approval later this year.
These quantities, together with the BP operated Holstein field, constitute
the underpinning volumes for the development.
The system will link to Ship Shoal Block 332, which connects to the existing
Manta Ray gas gathering system and the Cameron Highway oil pipeline system -
a new offshore pipeline recently announced by El Paso Energy Partners. From
there, oil and gas will be transported to markets in Texas and Louisiana.
The participants in the Caesar and Cleopatra pipeline system are BHP
Billiton, BP (operator), Shell, Equilon Pipeline Company, and Unocal. BP
will be the construction manager and operator of these systems through its
wholly-owned subsidiary Mardi Gras Transportation System, Inc.
****
Further information can be found on our Internet site:
http://www.bhpbilliton.com
Australia
Andrew Nairn, Investor Relations United Kingdom/South Africa
Tel: + 61 3 9609 3952 Michael Campbell, Investor & Media
Mobile: +61 408 313 259 Relations
email: Andrew.W.Nairn@bhpbilliton.com Tel: +27 11 376 3360
Mobile: +27 82 458 2587
Mandy Frostick, Media Relations email:
Tel: +61 3 9609 4157 Michael.J.Campbell@bhpbilliton.com
Mobile: +61 419 546 245
email: Ariane Gentil, Manager
Mandy.J.Frostick@bhpbilliton.com Communications
Tel: +44 20 7747 3977
United States Mobile: + 44 7881 518 715
Francis McAllister, Investor Relations email:
Tel: +1 713 961 8625 Ariane.Gentil@bhpbilliton.com
Mobile: +1 713 480 3699
email:
Francis.R.McAllister@bhpbilliton.com
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