Gas Pipeline Projects Targeting Southeastern Louisiana LNG Export Demand

Friday, 03/17/2023  Published by: Sheetal Nasta  rbnenergy.com

To view the article along with the graphs, use this link.  https://rbnenergy.com/gotta-get-over-part3-gas-pipeline-projects-ta...

Hardly a day goes by without news related to U.S. LNG export capacity expansions, whether it’s upstream supply deals, offtake agreements or liquefaction capacity announcements. One project is nearing commercialization, another five are under construction and due for completion in the next few years, still others are fully or almost-fully subscribed and will be officially sanctioned any day now, and the announcements keep coming. Just days ago, Venture Global reached a final investment decision (FID) for the second phase of its Plaquemines LNG project. With export development accelerating in the coming years, more natural gas pipeline capacity will be needed, particularly for moving gas supply to the Louisiana coast, where the bulk of the new capacity will be sited. In today’s RBN blog, we continue our series highlighting the pipeline expansions targeting LNG export demand, this time focusing on projects moving gas to southeastern Louisiana, including those designed to deliver feedgas to Venture Global’s under-construction Plaquemines LNG project.

In the first part of this blog series, we started with an overview of the U.S. LNG export projects driving midstream development along the Gulf Coast, including those that are already operational, have reached FID, or are fully subscribed and on the cusp of reaching FID. In Louisiana (or just across the Texas border), these include Venture Global’s (VG) soon-to-be-operational Calcasieu Pass; QatarEnergy and ExxonMobil’s Golden Pass; the first phase of Sempra Energy’s Port Arthur LNG; and VG’s Plaquemines LNG in southeastern Louisiana, including Phases 1 and 2. In southeastern Texas, Cheniere sanctioned its Corpus Christi Stage III project last summer, while NextDecade’s Rio Grande LNG in Brownsville, TX, is also closing in on FID.

In addition, there are numerous other greenfield facilities proposed for the Texas-Louisiana coast that are working to secure the regulatory approvals and/or commercial commitments to reach FID, including Energy Transfer’s Lake Charles LNG, VG’s CP2 LNG, Tellurian’s already-under-construction Driftwood LNG, and VG’s Delta LNG, among others. As for brownfield expansions, Cheniere is considering another midscale expansion at Corpus Christi, while Sempra’s Cameron LNG and Freeport LNG have announced Train 4 expansions. Cheniere also recently announced a major, 20 million tons per annum (MMtpa; ~2.6 Bcf/d) expansion of its Sabine Pass LNG facility. (For a complete list and map of projects, including offshore facilities, see the LNG Voyager Quarterly.)

One of the primary criteria for building these LNG export terminals — along with regulatory approvals and financial commitments — is securing the gas supply to feed the liquefaction plants, including the pipeline capacity to move gas from supply basins to the facility. In Part 1, we reviewed some of the recently completed expansions, including TC Energy’s Louisiana Xpress and Alberta Xpress, Kinder Morgan’s Acadiana expansion of its Louisiana system, and Energy Transfer’s Gulf Run Transmission. And, in Part 2, we turned to future pipeline expansions, starting with those moving incremental gas to the Port Arthur/southwestern Louisiana area as well as “last mile” projects to two advanced-stage facilities: Golden Pass, which reached FID and is under construction, and Port Arthur, which is fully subscribed and expected to reach FID this month. These pipelines included Williams’s Louisiana Energy Gateway (LEG), DT Midstream’s expansion of its Haynesville Louisiana Energy Access Project (LEAP), NGPL’s Texas Louisiana Expansion, the Golden Pass LNG Bidirectional Pipeline project (which would receive Haynesville and other supplies via Gulf Run), and Port Arthur Pipeline’s Texas Connector and Louisiana Connector. We have included the map from Part 2 below in Figure 1 for easy reference.

In the same vein, we should mention another project here — Momentum Midstream’s New Generation Gas Gathering project (NG3; green-and-black dashed line in Figure 1). Momentum took FID for NG3 in late September. The new system involves building a 264-mile pipe that will provide an initial 1.7 Bcf/d (and up to 2.2 Bcf/d) of incremental capacity from the Haynesville to Gulf Coast markets and will include a carbon capture and sequestration (CCS) component that will permanently sequester 2 million tons/year of carbon dioxide (CO₂). The pipeline project is anchored by firm commitments from Chesapeake Energy and Southwestern Energy and is targeting in-service by Q4 2024.

As we mentioned in previous episodes, there are also other pipeline projects specifically tied to export facilities that have yet to reach FID, and we’ll come back to those later in the series. For today, we’ll shift our focus to those that are designed to increase feedgas supplies in the southeastern part of Louisiana, including for deliveries to the first LNG export facility to reach FID in that area: VG’s Plaquemines LNG, as summarized in Figure 2 below.

We recently discussed Williams/Transco’s Texas to Louisiana Energy Pathway project, which plans to move volumes from southeastern Texas across southern Louisiana for delivery at Transco’s Station 65 near the Louisiana-Mississippi border. We also mentioned that TC Energy is planning the 1.5-Bcf/d Gillis Access Project, as well as a 1.4-Bcf/d extension of Gillis Access, to increase takeaway from the Gillis, LA, feedgas hub in 2024-25, and this could also include deliveries to southeastern Louisiana. Besides these, there’s also Enterprise Products Partners’ Acadian Expansion II, which is slated to add 400 MMcf/d of capacity on the Acadian Pipeline (light brown line in Figure 2) in Q2 2023. The last expansion of Acadian was in December 2021, when Enterprise completed its Acadian Gillis Lateral. The 1-Bcf/d lateral pipeline extends 80 miles from the company’s existing Acadian Haynesville Extension (AHE) near Alexandria, LA, to third-party interconnects near Gillis, including those that deliver gas to Sabine Pass and Cameron LNG. At the same time, Enterprise also increased AHE capacity north of the Gillis Lateral to 2.1 Bcf/d, from 1.8 Bcf/d previously, through incremental compression. The latest expansion, Acadian Expansion II, will increase Acadian’s capacity north of the Gillis Lateral by another 400 MMcf/d to 2.5 Bcf/d, while also increasing the capacity south of the Gillis Lateral to 1.5 Bcf/d, from 1.1 Bcf/d previously.

Then there are several pipeline expansions tied directly to the Plaquemines facility, which we zoom into in Figure 3 below. VG greenlit Phase 1 of the export terminal in May 2022, and in December, it requested regulatory approval to accelerate construction activity for the terminal and the accompanying feedgas pipeline, Gator Express. And, as we noted earlier, in the past week or so, VG also announced FID, along with a full notice to proceed with construction, for Phase 2.

The first phase of Gator Express (yellow-and-black dashed line in Figure 3), which is due online this year, consists of a 42-inch-diameter pipeline extending 15 miles that will move as much as ~2 Bcf/d north from offshore interconnects with Tennessee Gas Pipeline (TGP; purple line) and Texas Eastern Transmission (TETCO; blue line) to the Plaquemines terminal (green diamond). The second phase of Gator Express (orange-and-black dashed line) will add another ~2 Bcf/d of capacity with an adjacent 12-mile segment extending from the TETCO interconnect to the terminal.

As far as how Gator Express will source supply, there are three main routes involving legacy systems that will feed the terminal — TETCO, TGP and Columbia Gulf Transmission (CGT) — each with expansion projects associated with Plaquemines LNG.

First, there are a couple of projects that will expand TETCO’s existing capacity through southern Louisiana for delivery to Plaquemines: (1) the Venice Extension (light blue halo), which will add up to 1.3 Bcf/d of capacity on TETCO’s Line 40 to an interconnect with Gator Express, and (2) the Gator Express Meter Project (orange square), which will add new metering and regulating (M&R) facilities on Gator Express, plus interconnect piping from Line 40 to the M&R facilities to supply another 240 MMcf/d from TETCO’s Line 40 on a firm basis. The Venice Extension received a favorable final environmental impact statement (FEIS) from the Federal Energy Regulatory Commission (FERC) last month and is targeting completion in 2024, while the Gator Express Meter Project is due online in July 2023.

Receipts from TGP will come from existing capacity, as well as the newly sanctioned Evangeline Pass Expansion project (light maroon halo on maroon line in Figures 2 and 3), which will also be phased in. The project involves expanding sections of two legacy long-haul interstate pipelines — TGP and Southern Natural Gas (SNG; maroon line) to deliver as much as 1.1 Bcf/d of incremental feedgas supplies to Gator Express. Once completed, SNG will lease capacity to TGP, receiving up to 1.1 Bcf/d from TGP in Mississippi and redelivering the gas to TGP in southern Louisiana. The initial phase, which is centered on modifications to TGP, is currently under construction and targeting service by October 2024, in time to serve half of the 13.33 MMtpa (1.75 Bcf/d) of liquefaction capacity that’s part of the first phase at the Plaquemines terminal. Phase 2 of Evangeline Pass, which is due for completion in July 2025, would involve the remaining work on TGP, along with the planned modifications to SNG, and would provide feedgas for the second half of the terminal’s first phase of development.

Finally, TC Energy’s East Lateral Xpress Project (ELXP; red-and-black dashed line) will utilize existing and incremental capacity to provide up to 725 MMcf/d of firm service from Columbia Gulf Transmission’s existing East Lateral (CGT-EL; light pink line) to a new interconnect in Plaquemines Parish with Gator Express for subsequent delivery to the terminal. The project involves adding two new compressor stations along CGT’s existing system (in St. Mary’s and Lafourche parishes) and a new 8.1-mile, 30-inch-diameter lateral pipeline extending from CGT-EL to a new delivery meter with Gator Express. Altogether, the additional compression and lateral will provide 575 MMcf/d of eastbound capacity from CGT’s onshore pool in Rayne, LA, as well as 150 MMcf/d of westbound capacity from Venice, LA, to the facility via ELXP and Gator Express. The expansion is targeting completion in February 2025.

Based on the completion targets of the pipeline expansions, it appears feedgas for the initial phase of Plaquemines LNG will come primarily from TETCO (via the Venice Extension and Gator Express Meter projects) and TGP via the first phase of Evangeline Pass, while the remainder of the TGP/Evangeline Pass expansion capacity and the 725 MMcf/d from CGT/ELXP will be completed in time for subsequent phases of terminal development. 

In future episodes, we’ll highlight announced pipeline projects associated with pre-FID facilities in Louisiana, as well as delving into plans for routing incremental gas for export from the Texas Gulf Coast.