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Reuters: UPDATE 1-Williams to build pipelines to Perdido hub

Mon Jul 30, 2007 8:50 PM BST
(Adds new details, background)

NEW YORK, July 30 (Reuters) – Williams Cos. Inc. said on Monday it plans to spend $480 million to build pipelines to the Perdido hub, a floating production facility that Royal Dutch Shell, Chevron Corp and BP Plc are building in the deepwater Gulf of Mexico.

Williams said it plans to build 184 miles of oil and gas pipelines and expand its natural gas processing capacity as part of its Perdido Norte project.

Williams has agreements with the three companies to provide gathering, processing and transportation services over the life of their reserves in the area around the hub. It said it will begin collecting volume-based fees for services it provides when production starts.

Tulsa, Oklahoma-based Williams plans 107 miles of natural-gas gathering pipeline with the capacity to transport approximately 265 million cubic feet per day and a 77-mile crude-oil pipeline designed to move 150,000 barrels per day.

To accommodate the new supply from the gas pipeline, Williams will boost capacity at its Markham, Texas, gas-processing plant to more than 500 million cubic feet per day from the current level of 300 million cubic feet per day .

The planned Perdido hub is expected to pump 100,000 barrels per day of oil and 200 million cubic feet per day of natural gas, or 130,000 barrels of oil equivalent a day, from the highly anticipated nearby Great White, Tobago and Silvertip fields.

Shell will operate the Perdido hub, which will be located about 220 miles south of Galveston Texas, in about 8,000 feet of water. It will hold a 35 percent stake in the spar platform, with Chevron and BP owning the rest.

The hub is being designed with an expected lifetime of over 20 years, Shell has said. (Reporting by Michael Erman, editing by Jeffrey Benkoe)

© Reuters 2007. All Rights Reserved.

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