Enbridge to Build Pipelines for BP’s US Gulf of Mexico Deepwater Oil Project
(Credit: Enbridge)
Canadian pipeline company Enbridge has secured an agreement with BP to build, own, and operate crude oil and natural gas pipelines in the U.S. Gulf of Mexico for the recently sanctioned Kaskida development.
The crude oil pipeline, named the Canyon Oil Pipeline System (Canyon Oil), will be a combination of 24-inc and 26-inch pipe with capacity of 200,000 barrels per day.
It will originate in the Keathley Canyon area and deliver crude to the existing Green Canyon 19 platform, operated by Shell Pipeline Company for ultimate delivery to the Louisiana market.
The natural gas pipeline, named the Canyon Gathering System (Canyon Gas), will be a 12-inch pipeline with capacity of 125 million cubic feet per day and will connect subsea to Enbridge's existing Magnolia Gas Gathering Pipeline, which then delivers to Enbridge's downstream FERC-regulated Garden Banks Gas Pipeline.
The definitive agreements are underpinned by long-term contracts which are consistent with Enbridge's low-risk business model and provide utility-like returns.
The agreements contain options which BP may elect to exercise in order to connect potential future production from its emerging Paleogene portfolio into the newly developed pipelines.
Both the Canyon Oil and the Canyon Gas pipelines are being designed to accommodate connections from nearby discoveries.
The cost of the pipelines will be approximately $700 million, Enbridge said.
"The Canyon Oil and Gas pipelines offer an attractive opportunity for Enbridge to serve customers in the Gulf of Mexico and further expand our U.S. Gulf Coast footprint. The agreements generate stable and predictable cash flow and provide future growth opportunities," said Cynthia Hansen, EVP & President Gas Transmission and Midstream.
In July 2024, BP made a final investment decision on the Kaskida project, with the oil production expected to start in 2029.
Kaskida will be BP’s sixth hub in the Gulf of Mexico, featuring a new floating production platform with the capacity to produce 80,000 barrels of crude oil per day from six wells in the first phase.
In August, BP selected Exmar Offshore and Audubon Engineering Company to complete engineering and design of a floating production unit (FPU) for the Kaskida development.
Engineering work for the Kaskida FPU is already underway. Singapore's Seatrium had previously been selected to carry out early engineering work.
February 2025
