Enbridge said that it will support BP’s recently sanctioned Kaskida development in the US Gulf of Mexico by constructing and operating two pipelines with an investment of around $700m.
The crude oil pipeline to be built as part of this initiative is dubbed the Canyon Oil Pipeline System. Originating from the Keathley Canyon area, this pipeline will transport crude to the Shell Pipeline-operated Green Canyon 19 platform.
Eventually, the crude will be delivered to the Louisiana market. To be made up of a combination of 24″ and 26″ pipe, the Canyon Oil Pipeline System will have a transportation capacity of 200,000 barrels per day.
Enbridge will also build a natural gas pipeline called the Canyon Gathering System to support the Kaskida development. This 12″ pipeline will be capable of transporting 125 million cubic feet per day.
The Canyon Gathering System will connect underwater to Enbridge’s existing Magnolia Gas Gathering Pipeline, which then transports the gas to the company’s Garden Banks Gas Pipeline.
Enbridge plans to begin the detailed design and procurement activities of the pipelines in early 2025 with a target to make them operational by 2029.
According to the Canadian energy delivery company, both the Canyon Oil and the Canyon Gas pipelines are being designed to facilitate connections from adjacent discoveries.
Enbridge said that the definitive agreements for the pipelines are supported by long-term contracts which align with its low-risk business model, while delivering utility-like returns.
Furthermore, the agreements have options which BP may opt to exercise to link potential future production from its emerging Paleogene portfolio into the two pipelines.
Enbridge gas transmission and midstream EVP and president Cynthia Hansen said: “We are extremely pleased to extend an existing relationship with BP and support their new deepwater development. This opportunity diversifies our Gulf of Mexico offshore business, strengthens our significant natural gas pipeline portfolio, and enhances our ability to meet the strategic needs of our customers.
“The Canyon Oil and Gas pipelines offer an attractive opportunity for Enbridge to serve customers in the Gulf of Mexico and further expand our US Gulf Coast footprint. The agreements generate stable and predictable cash flow and provide future growth opportunities.”
Kaskida, which will be the sixth hub of BP in the Gulf of Mexico, is anticipated to begin production in 2029. In its first phase, the project will produce 80,000 barrels of crude oil per day from six wells through a new floating production platform.
