Williams Companies, Inc. (WMB) together with DCP Midstream Partners, L.P. (DPM) has announced through its general partner Williams Partners L.P. (WPZ), that the new extended Discovery natural gas gathering pipeline system has now become operational.
The 20-inch Keathley Canyon Connector is a 209-mile long deepwater gas gathering pipeline system which, along with the South Timbalier Block 283 junction platform, serves producers in the central ultra-deepwater Gulf of Mexico (GoM).
The Keathley Canyon Connector, which originates in the southeast portion of the Keathley Canyon protraction area, has a capacity to gather over 400 million cubic feet per day (MMcf/d) of natural gas. The pipeline ends in Discovery’s 30-inch diameter mainline at Discovery’s new junction platform. Constructed in depths of about 7,200 feet of water, the pipeline is located 300 miles south-southwest of New Orleans.
The Keathley Canyon Connector extension is backed by long-term contacts with owners of Lucius and Hadrian South as well as Heidelberg and Hadrian North. The owners have been contracted for natural gas gathering, transportation and processing services for production from those fields. Moreover, the new pipeline system is close to other high-potential deepwater GoM discoveries and prospects.
Aside from the offshore gathering system, the Discovery system comprises the 600 million cubic feet per day Larose natural gas processing plant, connects six interstate/intrastate gas pipelines and the 35,000 barrels per day Paradis fractionation facility to the markets.
Williams owns the controlling interest in the Discovery system. Its general partner Williams Partners L.P., the operator has 60% ownership. The remaining 40% is held by DCP Midstream Partners, LP.
Williams Companies currently carries a Zacks Rank #3 (Hold).
A better-ranked player from the energy sector InterOil Corporation (IOC) sports a Zacks Rank #1 (Strong Buy).
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