15-04-08 Brazil's Petrobras America unit is negotiating with offshore pipeline companies in the Gulf of Mexico over how it will transport associated natural gas to shore from its ultra-deepwater Cascade and Chinook oil fields, a top Petrobras America executive said. The Brazilian major, which operates the fields in the Gulf's Walker Ridge area, expects to clinch a deal in about two months, Cesar Palagi, Walker Ridge asset manager for Petrobras America, said during a lunch presentation.

"We are negotiating with pipeline owners," Palagi said after the presentation. "What we plan to do is build a connection to existing Gulf of Mexico infrastructure," he said. The new pipeline link would be "about 60 miles or so," and carry about 16,000 mm cfpd of gas to an existing pipeline and then to shore, he said.
Cascade and Chinook, discovered in 2002 and 2003 respectively, are slated for first production in mid-2010 from just three wells. These would likely be the first output from the Gulf's emerging Lower Tertiary play in waters more than 8,000 feet deep.

Further west, Shell is also developing its Perdido Hub project to produce several Lower Tertiary discoveries in the Gulf's Alaminos Canyon area, but that development is not expected to come onstream until after 2010.
Bringing the two online wells from Cascade and one at Chinook constitutes the first phase of those fields' development, said Palagi. Phase Two would add more wells, while a third phase with still more wells is tentatively slated for 2016.

Petrobras and independent Devon Energy are 50-50 partners in Cascade; the Brazilian company also has 66.7 % of Chinook while Total has 33.3 %. Petrobras also holds stakes in Lower Tertiary discoveries that have yet to be sanctioned, such as BP-operated Stones and Chevron-operated St Malo. The play exists at total depths of around 27,000 feet and below.
The Brazilian company also holds dozens of Gulf leases in Walker Ridge, Alaminos Canyon and Keathley Canyon which hold potential Lower Tertiary targets.

Palagi also noted that Petrobras was also apparent high bidder on several such blocks in the Central Gulf Sale 206, including one in southern Keathley Canyon where it bid $ 31 mm.
Palagi said he did not know when the company would drill its next Lower Tertiary target, but guessed one or even two such wells could be spud per year after 2009, when Petrobras will have two deepwater rigs available.