General Interest - Quick Takes Enterprise, partners outline Texas port system

Enterprise Products Partners LP, Teppco Partners LP, and Oiltanking Holding Americas Inc. have formed a joint venture to design, construct, own, and operate a Texas offshore oil port and pipeline system to move waterborne oil to refining centers along the upper Texas Gulf Coast. Subject to regulatory approvals and permitting, the partners intend to have the system in service by fourth-quarter 2010.

The Texas Offshore Port System (TOPS) project would include an offshore port about 36 miles from Freeport, Tex., a subsea export pipeline landing near Freeport, two onshore storage facilities with capacity for 5.1 million bbl of oil, and an onshore distribution system.

Plans include a total of 16 miles of pipeline capable of moving 1.8 million b/d. The partners "will be able to expand the system with construction of additional offshore facilities.

TOPS initial design calls for two single-point mooring buoys in about 115 ft of water capable of offloading 1 00,000 bbl/hr.

The TOPS pipeline system "would extend from the offshore port to Freeport 49 miles along the Texas Gulf Coast to a planned 3.9 million bbl oil storage facility in Texas City, Tex. From there, the pipeline would connect to existing oil pipeline systems serving Texas City and Houston Ship Channel refineries.

A separate but complementary component of TOPS involves construction of a 75-mile pipeline extending from Texas City to a 1.2-million bbl storage facility near Port Arthur, Tex. (bringing the system to its 5.1 million bbl storage capacity).

This storage facility would connect to area refineries and other facilities via pipeline and would also be able to deliver crude from existing Texas City docks and storage facilities to PortArthur- Beaumont refineries.

Long-term supply contracts "with Motiva Enterprises LLC and an affiliate of ExxonMobil Corp. total about 725,000 b/d and provide the financial underpinning for the project.

Enterprise ascribes demand for TOPS to planned refinery expansions along the upper Texas Gulf Coast expected to add about 425,000 b/d of capacity beginning in 2010, as well as expected increases in general ship traffic at onshore ports. Among current expansion projects is Motiva's Port Arthur refinery expansion, which will add 325,000 b/d of capacity in 2010 (OGJ, Apr. 28, 2008, p. 20) and Valero's 90,000 b/d expansion, also in Port Arthur, and expected to be complete by second-quarter 2011 (OGJ, Aug. 18, 2008, Newsletter).

Enterprise sees TOPS as offering an economic and safe alternative to increased lightering or ship channel transits as this increased demand is met. TOPS would be able to accommodate ultralarge crude carriers (ULCCs) transporting as much as 3 million bbl of crude.

Affiliates of Enterprise, Teppco, and oiltanking each have one - third ownership in the joint venture and expect to invest about $600 million each in the project.

Petroport Inc., Corpus Christi, Tex., proposed an offshore crude port near Freeport in 1993 (OGJ, Sept. 27, 1993, p. 32), but this project never came to fruition. The Louisiana Offshore Oil Port, 18 miles south of Grand Isle, La., in 110 ft of "water uses three single-point mooring buoys and is the only US port currently capable of offloading ULCCs.

Nigeria relinquishes Bakassi to Cameroon

Nigeria has ceded control over the potentially oil-rich Bakassi Peninsula to Cameroon amid threats from armed groups protesting the transfer.

The handover ceremony in Nigeria's Calabar, marked by ceremonial flag swapping, ends a territorial dispute that has almost triggered "war in the past. The event "was relocated from the peninsula's main town because of security concerns.

Bakassi is a 1,600 km border area that juts into the Gulf of Guinea (OGJ, Sept. 13, 2004, Newsletter). The majority of the population living in the peninsula are Nigerian fishermen and their families.

In 2002, the International Court of Justice ruled that Nigeria should relinquish control following the border dispute between the countries. According to Nigerian press reports, a spokesman for Nigeria's President UmaruYar'Adua said that although the handover was painful, Nigeria was bound by international commitments to keep its promise to hand back the peninsula in the name of peace.

However, legal fighting, political disputes, and gunfire have delayed the process. Opponents in Nigeria argued that parliament, as required by the constitution, never ratified the agreement to hand over the territory. About 50 people died last year in clashes related to this issue, according to Nigerian reports.

Analysts say that Cameroon "will need to stabilize security before it can begin oil exploration.

United Nations Chief Ban Ki-moon described the transfer as a triumph for the rule of law. "Beginning "with the withdrawal of Nigerian troops from Bakassi 2 years ago and culminating in this ceremony, the case of the Bakassi Peninsula has proven the viability of a peaceful and legal settlement of border disputes "when it is done "with the full support of the international community and in a spirit of mutual respect, good neighborliness, and cooperation."

Exploration & Development - Quick Takes

Nexen to fast-track Blackbird oil development

Nexen Petroleum Inc., Calgary, has suspended its Blackbrid well as a future producer in the UK North Sea after a drillstem test indicated an average of 3,800 b/d of oil production potential, with the oil flowing through a 34/64-in. choke.

The well, drilled on Block 20/2a, 6 km south of Nexen-operated Ettrick field, struck 111 ft of net pay in multiple zones.

Nexen described the oil as being high quality in good quality reservoir sands. It plans to fast-track the development as a subsea tieback to the nearby Ettrick floating production, storage, and offloading vessel.

Charlie Fischer, Nexen's president and chief executive, said: "Satellite discoveries such as Blackbird allow for quick and cost effective tie-backs to existing infrastructure, "which generates incremental value."

Nexen is operator of the Blackbird well "with a 79.73% working interest. Other coventurers include Bow Valley Energy Ltd. 12% and Atlantic Petroleum 8.27%.

Bankers eyes higher ArdmoreWoodford gas flow

The newly separated US unit of Bankers Petroleum Ltd., Calgary, reported a sharply higher flow rate at its fifth horizontal well in Tishomingo field in the Ardmore basin in southern Oklahoma.

The company is making several efforts to increase capacity for its gas sales from the area.

Initial test rate at the Dunn 2-1H well was 4.8 MMcfd of gas equivalent in "what the company supposed is the result of an unspecified modified hydraulic fracturing technique. The wells produce gas-condensate and oil from Mississippian-Devonian Woodford shale.

BNK Petroleum Inc., the US subsidiary, drilled and cased eight wells in the quarter ended June 30 and spud four others. The company, "whose 4 MMcfd of gas equivalent of output from the play is limited by facilities constraints, plans to stimulate more wells as it obtains more gas processing capacity.