March 6, 2018 / 11:45 PM / a year ago

Mexican offshore Trion project partners weigh floating oil facility

HOUSTON (Reuters) - Developers behind Mexico’s flagship deepwater oil venture Trion are considering using a floating facility to handle production from the massive field in the Gulf, the companies said on Tuesday.

The decision would allow output from the Pemex and BHP Billiton project to be offloaded to tankers, instead of transporting it via pipelines to the United States. A floating production storage and offloading facility (FPSO) could be more expensive, but offers greater flexibility in export destinations.

“This field appears to be well-suited for an FPSO,” Steve Pastor, president of operations for BHP Billiton, told a news conference at the CERAWeek energy conference on Tuesday. A FPSO would allow the project to be more efficient, he added.

The $11 billion Trion, a joint venture signed a year ago after BHP won an auction to become Pemex’s partner and the project’s operator, is near the U.S. border, where companies have developed vast pipeline networks. It is estimated to contain reserves of about 500 million barrels of oil.

“We all appreciate that there are significant resources near Trion,” Pastor added, referring to existing pipelines on the U.S. side of the Gulf with spare capacity.

There has been no final investment decision on the project signed between the partners. An exploration plan was approved only this month by Mexico’s regulator, said Carlos Trevino, Pemex’s CEO.

Mexico last year said the United States could become one the markets for Trion’s oil output, but Pastor said nothing is yet agreed upon.

The executive added that Trion is trying to speed up processes and contracts to turn into Mexico’s first productive deepwater project. A date for early production has not been set.

A drilling vessel was recently contracted from offshore oil service firm Transocean Ltd under a two-year agreement, BHP said. The company also opened an office in Tampico, in the southeastern part of the state of Tamaulipas, for its land operations.

Reporting by Marianna Parraga; Editing by Matthew Lewis

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