Momentum Midstream Takes FID on 1.7 Bcf/d Haynesville Natural Gas Gathering, Carbon Capture Project

By Andrew Baker  September 26, 2022 naturalgasintel.com

Private equity-backed Momentum Midstream LLC said Thursday it is moving forward with the New Generation Gas Gathering (NG3) project in the Haynesville Shale.

The project, which is meant to supply growing Gulf Coast and LNG export demand, is to have initial capacity of 1.7 Bcf/d, expandable to 2.2 Bcf/d. Momentum is a subsidiary of Encap Flatrock Midstream and other financial partners.

The NG3 project also would include a carbon capture and sequestration (CCS) component that will remove and permanently store underground 100% of the project’s carbon dioxide (CO2) emissions, creating a “net negative carbon footprint,” Momentum said. NG3 is slated to begin operating in the second half of 2024. 

Increasingly, U.S. producers and midstreamers are pursuing measures to reduce the emissions footprint of natural gas bound for the global liquefied natural gas market.

Long-term volume commitments for NG3 have been secured from several leading Haynesville producers, including anchor shipper Chesapeake Energy Corp., said Momentum CEO Frank Tsuru.

In addition to the final investment decision on NG3, Momentum has closed on the acquisition of Midcoast Energy LLC’s East Texas business (Midcoast ETX) from an affiliate of ArcLight Capital Partners LLC. The Midcoast ETX system comprises a gathering and transportation system with 1.5 Bcf/d of current volume and 1.0 Bcf/d of existing deliverability to the Gulf Coast and LNG markets, Momentum said.

Momentum also closed the acquisition of Align Midstream from Tailwater Capital LLC. Align owns several gathering systems adjacent to Midcoast with current volumes of 600 MMcf/d.

NG3, “combined with our existing capacity on the Midcoast system, will serve to address bottlenecks in the Haynesville Shale and provide much-needed capacity to the growing LNG markets on the Gulf Coast,” Tsuru said.

“Our customers are also excited to be part of the first of its kind net negative gas gathering project.”

Tsuru said Chesapeake’s anchor commitment for NG3 comes with an option to own 35% of the project, “creating alignment between Momentum and one of the largest Haynesville Shale producers.”

The Haynesville, along with the Anadarko Basin and Rockies region, are among the Lower 48 areas driving natural gas production growth currently in addition to the Permian Basin, said East Daley Capital’s Rob Wilson, vice president of analytics, in the latest episode of NGI’s Hub and Flow podcast.

The Energy Information Administration, meanwhile, is projecting the Haynesville to lead Lower 48 gas production growth in October.

Following the Midcoast and Align acquisitions, Momentum now is servicing volumes of more than 2 Bcf/d across a footprint comprising about 3,000 miles of gathering pipelines, 1.5 Bcf/d of treating capacity, 700 MMcf/d of processing capacity, 200,000 HP of compression and 820 miles of transportation pipelines, the firm said.

The infrastructure, which serves the East Texas and Southeast Texas Gulf Coast markets, delivers gas to customers including producers, utilities, end-users and LNG exporters.

“Pairing the extensive footprints of the Midcoast and Align assets with NG3, Momentum is able to relieve existing constraints in the Haynesville Shale, particularly the Shelby Trough, and allow our producer customers to reach premium Gulf Coast markets,” said Momentum President Brant Baird. “We also provide these Gulf Coast markets and LNG facilities with direct access to growing Haynesville Shale production.”