Inv in Gulf Mex Transport Sys
BHP Billiton Limited
20 February 2002
BHP Billiton Limited is issuing this announcement to fulfil disclosure
obligations arising from its secondary listing on the London Stock Exchange.
The text of this release is identical to that issued by BHP Billiton Plc
earlier.
20th February 2002
Number: 12/02
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 Mobile: +61 408 313 259 Michael Campbell, Investor & Media Relations
email: Andrew.W.Nairn@bhpbilliton.com Tel: +27 11 376 3360 Mobile: +27 82 458 2587
email: Michael.J.Campbell@bhpbilliton.com
Mandy Frostick, Media Relations
Tel: +61 3 9609 4157 Mobile: +61 419 546 245 Ariane Gentil, Manager Communications
email: Mandy.J.Frostick@bhpbilliton.com Tel: +44 20 7747 3977 Mobile: + 44 7881 518 715
email: Ariane.Gentil@bhpbilliton.com
United States
Francis McAllister, Investor Relations
Tel: +1 713 961 8625 Mobile: +1 713 480 3699
email: Francis.R.McAllister@bhpbilliton.com
BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209
Registered in Australia Registered in England and Wales
Registered Office: 600 Bourke Street Melbourne Victoria Registered Office: 1-3 Strand London WC2N 5HA United Kingdom
3000 Telephone +44 20 7747 3800 Facsimile +44 20 7747 3900
Telephone +61 3 9609 3333 Facsimile +61 3 9609 3015
The BHP Billiton Group is headquartered in Australia
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