Denbury Resources Inc.

 

Page Updated 05/27/2009

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THE GREEN PIPELINE PROJECT

 

 



Denbury Onshore, LLC is installing a 24” pipeline from Donaldsonville, Louisiana to the Hastings Field, south of Houston, Texas. The approximately 320 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) a growing independent oil and gas company engaged in acquisition, development and exploration activities in the U.S. Gulf Coast region. We are the largest oil and natural gas producer in Mississippi, own the largest carbon dioxide (“CO2 ”) reserves east of the Mississippi River used for tertiary oil recovery, and hold operating acreage in the Barnett Shale play near Fort Worth, Texas, onshore Louisiana, Alabama, and properties in Southeast Texas. Our primary goal is to increase the value of acquired properties through tertiary recovery operations, together with a combination of exploitation, drilling, and proven engineering extraction processes.

Our corporate headquarters are in Plano, Texas (a suburb of Dallas), and we have four primary field offices located in Laurel, Mississippi; McComb, Mississippi; Jackson, Mississippi; and Cleburne, Texas. At December 31, 2008, we had 797 employees, 493 of whom were employed in field operations or at the field offices.
 

Purpose of the Green Pipeline


The U.S. has limited methods to transport CO2. Denbury is currently installing the Green Pipeline to transport CO2 from both natural and manmade (anthropogenic) sources to petroleum reservoirs. We have currently entered into seven agreements with owners of potential sources of man-made CO2 and are in various stages of discussions with several other entities. To date, none of these potential industrial plants have started construction, so we are not certain that they will be built. Denbury plans to use this CO2 to recover oil that would not otherwise be economically produced. In addition to increased domestic oil production, our use of this CO2 will help reduce the release of this greenhouse gas into the earth’s atmosphere.
 

Facts About Proposed Pipeline

  • Size: 24” diameter pipeline
     

  • Length: Approximately 320 miles
     

  • Volume: Designed to transport up to 800 million standard cubic feet per day of carbon dioxide (CO2)
     

  • Design and Operations: The pipeline has been designed to operated under the rules and regulation of the Department of Transportation (DOT)
     

  • Regulatory: Compliant with local, state and federal regulations. Pre-pipeline construction involved approvals for wetland delineation, habitat evaluations and culture resource studies along with other environmental and safety statutes.
     

  • Targeted Completion Date:  Louisiana to Galveston Bay by mid 2010; Galveston Bay to Hastings in late 2010.

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):

  • Colorless, oderless, and tasteless gas
     

  • Non-flammable
     

  • Non-toxic but can acts as an asphyxiant in large amounts
     

  • Also used to manufacture dry ice and carbonated

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 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.

  • 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.
     

  • Pressure Testing - All of our pipelines are strength tested to establish maximum operating pressure (including a safety factor) prior to being placed into service.
     

  • 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.
     

  • 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.
     

  • Cathodic Protection - An induced electrical current is applied to our pipelines in addition to a protective coating to help prevent external corrosion.
     

  • Emergency Procedures - All pipeline operations personnel are trained 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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