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Denbury Onshore, LLC plans to install a 24” pipeline from
Donaldsonville, Louisiana to the Hastings Field, south of Houston,
Texas. The 314 mile pipeline is designed to transport both natural and
man-made (anthropogenic) carbon dioxide (CO2). The
CO2, a greenhouse gas, will be injected into oil
reservoirs to recover additional crude oil.
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Denbury Resources Inc. (NYSE: DNR) is a growing independent oil and gas
company. The Company is the largest oil and natural gas operator in
Mississippi, owns the largest reserves of CO2 used for tertiary oil
recovery east of the Mississippi River, and holds key operating
acreage in South Louisiana, Alabama, and Texas Barnett Shale. The
Company increases the value of acquired properties in its core areas
through a combination of exploitation drilling and proven
engineering extraction practices.
Our headquarters is located in Plano, Texas. At December 31, 2006,
we had 596 employees, 390 of whom were employed in field operations
or at the field offices.
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The United States has limited methods to transport CO2.
Denbury plans to install the pipeline and transport CO2
from both natural sources and man-made sources to petroleum
reservoirs. Denbury has currently entered into agreements to
purchase man-made (anthropogenic) CO2
production from three proposed “coal to liquid” plants which can
convert petroleum coke or coal into a variety of products including
ammonia, methanol, synthetic diesel fuel, or electrical power
generation. One such plant, the Faustina Plant proposed to be built
near Donaldsonville, Louisiana, is scheduled to be completed in 2010
and will convert petroleum coke into ammonia. As a byproduct of the
plant’s process, large quantities of CO2
will be produced, estimated to be around 200 million cubic feet per
day. Denbury plans to use this CO2
to recover oil that may otherwise not be economically productive. In
addition, our use of this CO2
will eliminate the release of this greenhouse gas into the earth’s
atmosphere. To date, none of these “coal to liquid” plants have
started construction, so we are not certain whether they will be
built, although it was recently announced by the Faustina Plant
owners that they plan to commence construction in late 2007 or early
2008. Denbury is in various stages of discussions with several other
entities that are considering building other coal or petroleum coke
gasification plants that want Denbury to sequester their CO2.
Facts About Proposed Pipeline
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Size: 24” diameter pipeline
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Length: Approximately 314 miles
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Volume: Designed to transport up to 800 million
standard cubic feet per day of carbon dioxide (CO2)
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Design and Operations: The pipeline will be
designed and operated under the rules and regulation of the
Department of Transportation (DOT)
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Regulatory: Compliant with local, state and
federal regulations. Pre-pipeline construction involves
approvals for wetland delineation, habitat evaluations and
culture resource studies along with other environmental and
safety statutes.
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Construction: Will occur after permitting and
approvals are received from over 11 governmental agencies
including federal, state, parish/county, city and levee boards ;
currently anticipated in late 2008.
CO2
Injection to Enhance Oil Recovery
CO2 is one of the most efficient
enhanced recovery mechanisms for crude oil. The CO2
acts somewhat like a solvent for the oil, removing it from the oil
bearing formation as the CO2
passes through the rock. CO2
enhanced recovery projects require large volumes of CO2,
which has only been discovered to date in just a few limited
geological basins. The limited number of existing CO2
pipeline systems which are necessary to transport the CO2
make enhanced recovery projects even less common. The proposed Green
Pipeline will be one of the first pipelines designed to transport
man-made CO2 so that it can be
injected or sequestered into the ground, keeping it out of the
earth’s atmosphere and utilizing it to recover oil that would not
otherwise be produced.
Facts About
Carbon Dioxide (CO2):
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Carbon Dioxide gas is colorless
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At low concentrations the gas is odorless
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At higher concentrations it has a sharp, acidic odor
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Acts as an asphyxiant and is an irritant
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CO2 is also used to
manufacture dry ice, carbonated soft drinks and beers
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Acts as an inert gas during chemical processing
Pipeline Safety
According to the U.S. Department of Transportation, pipelines are
the safest, most reliable, and least costly way to transport energy
products. Denbury Onshore is committed to maintaining the highest
standards of safety. We design, install, test, operate, and maintain
our pipelines to meet or exceed regulatory standards. Our employees
are thoroughly trained to maintain and operate the systems safely,
and we are proud of our safety record. We use a variety of methods
to ensure safe operations of our pipeline systems.
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Monitoring - Operating conditions on our pipelines
are monitored 24 hours a day by a control center. The computer
system has the capability to operate automated valves to
shutdown and/or isolate sections of the pipeline systems, if
necessary.
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Pressure Testing - All of our pipelines are
strength tested to establish maximum operating pressure
(including a safety factor) prior to being placed into service.
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Visual Inspection - Denbury’s pipeline
right‐of‐ways are inspected on a regular basis for signs of
damage and encroachment. Encroachments prevent us from gaining
access to all our facilities at all times for regular
maintenance or during emergencies. Marker signs are placed along
the right-of-way to alert the public of the existence of the
pipelines.
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Public Awareness Program - The program is designed
to help the public, contractors and others identify the location
of pipelines before excavating to prevent third‐party damages.
We are also members of one‐call centers in the states where we
operate pipelines.
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Cathodic Protection - An induced electrical
current is applied to our pipelines in addition to a protective
coating to help prevent external corrosion.
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Emergency Procedures - All pipeline operations
personnel are trained periodically for emergency preparedness
and are required to follow company’s procedures during emergency
situations.
Additional pipeline safety information can be obtained through
the following:
If you have any questions or need more information regarding The
Green Pipeline Project, please contact Laurie Burkes at
laurie.burkes@denbury.com.
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