Anadarko's $16 Billion in Projects Cover Ambitious Plans in Permian, Mozambique

Researched by Industrial Info Resources (Sugar Land, Texas)--Anadarko Petroleum Corporation (NYSE:APC) (Houston, Texas) expects to invest between $4.3 billion and $4.7 billion on capital programs in 2019, while delivering 10% more oil than in 2018. About 70% of the company's investments are directed toward oil-levered U.S. onshore assets, focused primarily on the Denver-Julesburg Basin and the Permian's Delaware Basin. Industrial Info is tracking more than $16 billion worth of active projects involving Anadarko and its subsidiaries.

Earlier this month, Anadarko announced it would sell virtually all of its midstream assets to Western Gas Partners LP (NYSE:WES) (The Woodlands, Texas), a master limited partnership (MLP) formed by Anadarko to acquire, own, develop and operate midstream assets, for $4.02 billion. Anadarko will maintain operational control (55.5% ownership) of its MLP following the sale, which is expected to close in first-quarter 2019.

About $1.4 billion of capital is being allocated toward upstream activities in the Delaware Basin of West Texas, where many of its Western Gas properties are located. Anadarko is nearing the completion of the $100 million first train at its natural gas-processing plant in Mentone, Texas, which it plans to start up this quarter. The facility will process up to 200 million standard cubic feet per day of natural gas from the Permian Basin, much of it from Anadarko's 12-well Silvertip project near Loving, Texas. The company already has brought several of these wells online, and will continue to do so following startup.

The Mentone facility is managed by the Western Gas MLP, which also is at work on a $100 million second train that is expected to wrap up in the first quarter of 2019 and double processing capacity. For more information, see Industrial Info's project reports on Train 1 and Train 2.

Click on the image at right for a map detailing the Mentone facility.

"It's very efficient with capital if you can drill a well, complete it and turn it immediately over to sales versus having to wait for that infrastructure," said Robin Fielder, the senior vice president of Western Gas, in a presentation at the Bank of America/Merrill Lynch 2018 Global Energy Conference. "And then also just for managing the entire system, the ability to look at the greater system from the molecule leaving the wellhead going through your gathering all the way into your processing and downstream. It allows us to optimize that, manage our line pressures and those sorts of things."

Anadarko's exploration investments in 2019 are expected to total about $250 million, some of which will be focused on opportunities related to existing properties in the deepwater Gulf of Mexico. Off the coast of Louisiana, Industrial Info is tracking a proposed, $160 million subsea tieback from the Constellation Field to the Constitution Spar in the Green Canyon of the Gulf of Mexico. Anadarko expects wells in the Constellation field to produce around 15,000 barrels of oil-equivalent per day. For more information, see Industrial Info's project report.

Mozambique LNG Project Closer to Reality
Last week, Anadarko announced it was allocating $200 million toward its proposed, $15 billion Mozambique liquefied natural gas (LNG) export project in Palma, Mozambique, and plans to make a final investment decision in the first half of 2019. The amount represents Anadarko's portion of the costs associated with ongoing site preparation for the shared onshore facilities; construction is expected to begin sometime next year, with the first LNG exports currently expected by 2023.

The two-train facility would have a total capacity of 12 million tons per annum. It would feature a pair of storage tanks, each with a storage capacity of 180,000 cubic meters, a condensate storage tank, and a $250 million offloading jetty and associated marine export facility. For more information, see Industrial Info's project reports on the liquefaction plant and jetty facilities.

The Mozambique LNG complex is located on a 30-square-mile site in the Afungi Peninsula, in the Cabo Delgado province of northern Mozambique. It accompanies next year's $200 million Area 1 gas field drilling program, located 35 miles off the coast of Palma, which involves drilling 16 wells in an area with an estimated lifetime production capacity of 20 trillion cubic feet. Product from the field would be fed to the facility via a $100 million subsea pipeline, which would run 35 miles and carry up to 100 million standard cubic feet per day of gas. For more information, see Industrial Info's project reports on the drilling field and pipeline.

"We've got our offshore contractor at the final stage of approval, as well as all the equipment that we're buying," said Michael Ingram, Anadarko's executive vice president for international deepwater and exploration, at the conference. "We're basically waiting on government approval to get that done. That really gives us great confidence in terms of the capital spend we're going to have for the project."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.