Leviathan Gas Pipeline Partners Acquires Placid Green Canyon Pipeline System, Plans Reactivation

Leviathan Gas Pipeline Partners L.P. has finalized the acquisition of the remaining ownership interests in the inactive Placid Green Canyon pipeline system from Hunt Petroleum Corp. and EP Operating L.P. The strategic move enables Leviathan to reactivate the offshore pipeline system, which has been renamed the Manta Ray Gathering System, and restore its operational capabilities. This development comes as Shell Pipe Line Corp. has begun construction on a new 125-mile crude pipeline, scheduled for completion in 1996, to connect the Green Canyon and Ewing Bank areas to the Mars pipeline and the Louisiana Offshore Oil Port's (LOOP) Clovelly storage facilities.

Key Takeaways:

• Leviathan Gas Pipeline Partners L.P. has acquired the remaining ownership interests in the Placid Green Canyon pipeline system from Hunt Petroleum Corp. and EP Operating L.P. for an estimated $15 million.
• The company plans to reactivate the offshore pipeline system, which has been renamed the Manta Ray Gathering System, and has already secured 57% ownership in the system.
• Shell Pipe Line Corp. is investing $100 million in the area to build a 125-mile crude pipeline, capable of carrying 200,000 barrels per day, with construction set to begin in mid-1995 and completion expected in 1996.
• Leviathan's 100%-owned Manta Ray system consists of approximately 51 miles of parallel 14- and 16-inch-diameter pipelines, a platform in Ship Shoal Block 207, and deep-water facilities.
• The system was installed in 1988 but was shut down and mothballed a year later, requiring minimal maintenance, and Leviathan plans to have the 16-inch-diameter gas pipeline back in service this month.
• The 14-inch-diameter pipeline will be reactivated as a crude oil pipeline, providing a new outlet for sour crude production in the Ewing Bank and Green Canyon areas.

Statistics:

• Leviathan Gas Pipeline Partners L.P. acquired the remaining ownership interests in the Placid Green Canyon pipeline system for an estimated $15 million.
• The company held a 57% interest in the pipeline system prior to the acquisition.
• Shell Pipe Line Corp. is investing $100 million in the area to build a 125-mile crude pipeline.
• The pipeline will be capable of carrying 200,000 barrels per day.
• Construction on both the Shell and Leviathan pipelines is set to begin in mid-1995, with completion expected in 1996.

Sources:

• [Leviathan Gas Pipeline Partners L.P.]
• [Hunt Petroleum Corp.]
• [EP Operating L.P.]
• [Shell Pipe Line Corp.]