Shenandoah is an ultra-high-pressure oil and gas development located in the deepwater Gulf of Mexico, US.
Beacon Offshore Energy, an upstream production company formed by Blackstone Energy Partners in 2016, is currently the operator and holds 20.05% interest in the deepwater project. BOE II Exploration, Blackstone Group’s another portfolio company, holds 10.95% stake in the project.
Other development partners of the project include ShenHai (49%), a wholly-owned subsidiary of Israel-based Navitas Petroleum, and HEQ Deepwater (20%), a company formed by Quantum Energy Partners and Houston Energy in 2021. HEQ Deepwater acquired 20% working interest in the Shenandoah development from BOE II Shen, an affiliate of Beacon Offshore, in August 2021.
The Shenandoah development partners reached final investment decision (FID) on the $1.8bn offshore development project in August 2021. Drilling of subsea production wells is expected to begin in the second half of 2022, with the first oil from the Shenandoah field anticipated in the fourth quarter of 2024.
Location and site details
The Shenandoah deepwater development is located in Walker Ridge blocks 51, 52, and 53 in the Gulf of Mexico, 257km off the coast of Louisiana, US. The project area spans 14,400 acres with water depths ranging between 1,700m and 1,900m.
Shenandoah discovery and appraisal details
Anadarko discovered the deepwater field by drilling the Shenandoah-1 exploration well in the Walker Ridge block 52 in 2009. Drilled to a total depth of 30,000ft into the Inboard Lower Tertiary Wilcox Play of the deepwater Gulf of Mexico, the discovery well witnessed 300ft net oil pay.
Following the discovery, Anadarko drilled five appraisal wells between 2012 and early 2017. It, however, suspended further appraisal activities at the field after the Shenandoah-6 appraisal well and sidetrack failed to find oil in the eastern portion of the field in 2017.
Shenandoah project background
Original partners of the Shenandoah project included operator Anadarko, ConocoPhillips, Cobalt International Energy, Marathon Oil, and Venari.
Anadarko and Conoco Phillips, the two major partners holding 33% and 30% interests respectively, withdrew from the project citing unsatisfactory appraisal results and weak commodity prices, in February 2018.
LLOG Exploration became the operator of the Shenandoah development, as affiliates of LLOG, Navitas Petroleum, and Beacon Offshore agreed to acquire 70% working interest in the project in April 2018.
Beacon Offshore assumed operatorship by acquiring LLOG’s 31% stake in the Shenandoah project in 2020.
Shenandoah field development plan
The initial field development plan involves drilling four subsea production wells, which will be tied back to the Shenandoah floating production and storage system (FPS) via a subsea manifold with dual flowlines and risers.
The FPS will be 91m long, 91m wide and 90m high. It will have the capacity to produce 100,000 barrels of crude oil and four million cubic metres (Mcm) of natural gas a day.
Construction of the FPS is expected to start at Hyundai Heavy Industries Ulsan shipyard in South Korea in the third quarter of 2022, with its installation at the Shenandoah field expected in the third quarter of 2024.
Gas export agreement
Williams entered an export agreement with Beacon and ShenHai to provide offshore natural gas gathering and transportation services as well as onshore natural gas processing services for the Shenandoah development in June 2021.
An 8km-long offshore lateral pipeline will be constructed from the Shenandoah platform to Discovery’s existing Keathley Canyon Connector gas pipeline.
The natural gas output of the field will be processed at Discovery’s processing plant in Larose, Louisiana, whereas the natural gas liquids will be fractionated at Discovery’s Paradis plant in Louisiana.
Subsea 7 bagged a subsea installation services contract valued between $150m and $300m for the Shenandoah development in January 2022.
The contractual scope includes engineering, procurement, construction, installation and commissioning (EPCIC) of subsea production structures, umbilicals, risers and flowlines. Subsea 7 is also responsible for the wet tow and hook-up of the semi-submersible FPS along with the installation of its mooring system.
Transocean was awarded a contract worth $252m to drill Shenandoah production wells using its ultra-deepwater drillship Deepwater in August 2021.
Korea Shipbuilding & Offshore Engineering (KSOE), a subsidiary of Hyundai Heavy Industries (HHI) Holdings, was awarded planning, procurement, construction and delivery contract worth KRW659.2bn ($576.44m) for the Shenandoah FPS in August 2021.
Vallourec, an industrial tube manufacturer based in France, was contracted to supply casing, tubing and accessories for the Shenandoah project in December 2021.
TechnipFMC was contracted by LLOG to supply subsea trees for the project in October 2019.