Gas pipeline constraints could hit Haynesville prices

By Marissa Luck  Updated 9:49 am CDT, Thursday, April 18, 2019  chron.com/business/energy

Rising production in the Haynesville and Marcellus shale plays could lead to new pipeline capacity constraints to the Gulf Coast sooner than some analysts originally thought. That may impact prices for Haynesville gas on the Gulf Coast at a time when more liquefied natural gas projects are expected to boost  demand for shale gas from those regions.

Rig activity in two of the country's most active shale gas plays has shot up in recent months, according to research and analysis firm RS Energy Group.So far this year, the Marcellus shale play in the northern Appalachia region has seen average rig activity jump to 54 rigs  from 42 rigs in the second half of last year. The Haynesville shale play, located in northwest Louisiana and East Texas, isn' t far behind with average active rigs jumping to 51 from 43 in the second half of last year.

Some new LNG projects are pulling from Haynesville region, including  Houston's Tellurian Inc., as well as from the Permian Basin. But while the first wave of LNG projects could rely on reversing the flow of existing pipelines, the next generation of LNG projects are being developed in conjunction with new pipelines.

Tellurian Inc. is building a pipeline from the Permian Basin, which likely will take third party gas, and a pipeline from Haynesville, where it will also produce its own gas. The Golden Pass LNG project in Sabine Pass, a joint venture of Exxon Mobil and Qatar Petroleum, will feed into Enable Midstream Partners' Golf Run Pipeline that connects to Haynesville, Marcellus, Utica and Barnett shale plays as well as the Mid-Continent region, according to a website for Gulf Run Pipeline.

So it's likely LNG project developers will make sure there is enough pipeline capacity for themselves - but which shale gas producers these pipelines benefit remains to be seen until more projects reach a final investment decision.