A pipeline network with spare capacity could allow Mexico to export oil and gas from its Trion field to the United States, the head of Mexico’s oil regulator has said. The comments were made by Juan Carlos Zepeda, head of the national hydrocarbons commission (CNH), in a Reuters report.

The deepwater Trion development, with prospective reserves of almost 500 MMbbl of oil, was farmed out in December by PEMEX to BHP Billiton, which became the operator of the $11-billion project. PEMEX retained a 40% stake, but jointly shares for the first time the risks and rewards of a potentially lucrative project with a private producer.

Although a development plan has yet to be submitted, the consortium could use a cheaper and quicker option of getting production to the United States by using pipelines that serve the neighboring Great White field on the US side of the Gulf of Mexico, Zepeda said, speaking at the recent CERAWeek conference in Houston.

The Great White field, operated by Royal Dutch Shell, BP, and Chevron Corp., is producing around 70,000 b/d, leaving 50% available capacity in a crude line and a gas line connected to the United States, Zepeda was quoted to say in a Reuters report.

“There are only 39 kilometers (24 miles) from the Trion field to the Great White’s facilities,” Zepeda told Reuters, noting that building a pipeline to Mexico’s shore would be more expensive and time consuming.

The pipelines from Great White field on the US side of the Perdido Fold Belt, the world’s second-deepest oil and gas production hub, are operated by Williams as part of its 1,370-mile (2,200-km) network of gas and crude lines in the Gulf of Mexico.

Other options for Trion production include building pipelines to the nearest ports, most likely Mexico’s Tampico or Brownsville in Texas, or setting up an FPSO facility.

A prominent Latin American crude exporter, Mexico is also a gas importer, so Trion could help the country reduce imports. In the meantime, Mexico’s gas imports are expected to reach 5 bcf/d soon, from around 4 bcf/d in recent months, said the CEO of Mexico’s Electricity Commission, Jaime Hernandez.

Another block awarded by Mexico to China’s state-controlled offshore oil producer CNOOC, which in December gained a foothold in Mexico's deepwater, is even closer to Great White.

“The (PEMEX and BHP) consortium must submit an appraisal in the coming 180 days, including test wells, to confirm the field’s extension and then a development plan must also be submitted,” Zepeda said.

Early production of light crude from Trion is expected for 2023, PEMEX’s director Jose Antonio Gonzalez Anaya said earlier this week in Houston. “For PEMEX, this is a historic deal. For 80 years, PMEX never had a partner with whom to share risks or equity,” he said. The project had been put aside in early 2016 due to the company's budget cuts and resumed nine months later as part of Mexico’s long-waited oil reform.

The CNH, which oversees contracts and runs oil auctions in Mexico, is offering 15 blocks for exploration and production in shallow water under profit sharing agreements and 26 onshore blocks under licenses, with results expected in June and July.

A new deepwater bidding round in the coming months is expected to offer blocks mostly in the same basins of Perdido and Salina. As in previous offshore auctions, licenses will be offered by the government to operate these blocks, Zepeda said.

Source: Offshore Mag - http://www.offshore-mag.com/articles/2017/03/mexico-eyes-export-options-for-deepwater-trion-field.html