Williams and Beacon ink export agreement for Shenandoah

U.S. energy company Williams has reached an export agreement with Beacon Offshore and its co-owner ShenHai, a subsidiary of Navitas Petroleum, to provide offshore natural gas gathering and transportation services and onshore natural gas processing services to the Shenandoah development in the Gulf of Mexico.

This will be done through the Discovery infrastructure in the central Gulf of Mexico, Williams said in a statement earlier this week.

Shenandoah is located 160 miles off the coast of Louisiana in the Walker Ridge area of the Gulf of Mexico.

“Our interconnected offshore and onshore infrastructure allows us to maximize value for our customers by providing a safe, seamless and direct path to market for deepwater producers in the Gulf”, said Micheal Dunn, Chief Operating Officer for Williams.

“Our investment in Shenandoah is a strategic expansion of our Gulf of Mexico infrastructure which further strengthens our portfolio of services. We are pleased to provide the entire spectrum of midstream capabilities to Beacon that will capture the full value of these important deepwater resources”.

Facilities to be installed include a five-mile offshore lateral pipeline build from the Shenandoah platform to Discovery’s existing Keathley Canyon Connector pipeline, and additional onshore processing facilities to handle the expected rich Shenandoah production.

The new, rich natural gas will be transported to Discovery’s processing plant in Larose, Louisiana, and the natural gas liquids will be fractionated and marketed at Discovery’s Paradis plant in Louisiana.

Shenandoah is expected to come online as early as late 2024.

Back in July 2020, Transocean was awarded a contract for drilling and completion services on the Shenandoah project. Under the contract, it was agreed for Transocean to drill four development wells for a duration of about 17 months. At the time, the field was operated by LLOG, but LLOG’s interest and operatorship was later that year acquired by Beacon Offshore.

Following an agreement with a shipyard to delay deliveries for two of its newbuild drillships, one of which was to work on Shenandoah, Transocean and Beacon agreed for drilling operations on the Shenandoah project to start during the third quarter of 2022.

Transocean expects Beacon to begin drilling on its Shenandoah project utilizing the Deepwater Atlas following a final investment decision from Beacon and its partners. That decision is expected to be made on or before 31 July 2021.