Calgary-based Enbridge Inc. and California-based Chevron will build a $500 million pipeline gathering system in the Gulf of Mexico, as both companies announced “future growth” was still the goal.

A letter of intent was announced Wednesday for the offshore pipeline. Under terms, Enbridge will construct, own and operate the Walker Ridge Gathering System and provide gas-gathering services for the potential Chevron’s Big Foot, Jack and St. Malo ultra-deepwater developments in the Gulf.

Walker Ridge gathering will boost the economics of Enbridge's Manta Ray and Nautilus offshore pipeline while forming a “strategic base for future growth opportunities in the ultra-deep Gulf of Mexico”. The new network could see 100 million cubic feet of gas per day travel the 300 kilometres of 8-inch,10-inch or 12-inch diameter pipeline layed at 2,000-metre water depths.

Enbridge offshore pipelines already move 40 percent of area natural gas production via the UTOS, Stingray, Garden Banks, Nautilus, Manta Ray, Mississippi Canyon, Okeanos and Destin systems.

The news brought cheer to Calgary, where Enbridge reported a fall in profit despite showing better business essentials than ever.

Earnings reached $393-million, down over $250 million from last July.

Tags: Chevron Corporation, Enbridge Inc.