New York — A soon-to-be-critical gas gathering system offering an incremental outlet for Haynesville production has begun system testing ahead of a scheduled August 1 startup, developer DTE Midstream said July 28.
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The Louisiana Energy Access Project, or LEAP, opens a 150-mile, 36-inch diameter pipeline corridor with an expandable 1 Bcf/d capacity, providing Louisiana Haynesville producers serviced by the existing Blue Union Gathering System with new access to the US Gulf Coast.
The pipeline's terminus at the Gillis Hub in southwest Louisiana offers shippers optionality to reach markets and end-users across the region via multiple interconnections to Texas Eastern Transmission, Transcontinental Gas Pipe Line, Cheniere Energy's Creole Trail Pipeline and Cameron LNG Pipeline.
The LEAP project's full capacity is currently contracted under long-term, demand charge agreements, although the system's capacity could ultimately be expanded to 1.6 Bcf/d, according to S&P Global Platts Analytics
DTE's new midstream project began initial deliveries on July 22, and has since supplied an average 70 MMcf/d to its interconnect with Creole Trail, Platts Analytics data shows.
"This extraordinary project connects a world-class resource basin to the Gulf Coast, a growing domestic demand center, [and] helps to meet international demand for natural gas through US LNG export facilities," David Slater, president and COO of DTE Midstream said in a press release.
While the startup of DTE's LEAP system isn't likely to show an immediate impact on gas prices at Haynesville's nearby Carthage hub, the project does offer producers some running room to grow output in an otherwise increasingly constrained shale basin. In July, cash prices at Carthage have averaged $1.65/MMBtu, or about 3 cents below the benchmark Henry Hub, S&P Global Platts data shows.
Over the past three years, improved technologies and efficiency gains and have allowed Hayneville producers to reignite the basin's early shale-era prowess, lifting output to record highs at over 13.5 Bcf/d earlier this year, up from just 7 Bcf/d in mid-2017, Platts Analytics data shows.
The Haynesville's low-cost production and its proximity to premium Gulf Coast markets has made the basin's supply increasingly sought after by shippers, LNG exporters and industrial end-users.
Currently, the basin's main access routes to the Gulf Coast market – Perryville to Henry Hub and Carthage to Houston Ship Channel – are becoming increasingly constrained as Haynesville production continues to grow. Along the Henry Hub corridor, Haynesville supply also competes with low-priced gas from Appalachia; along the Houston Ship Channel corridor, it competes with supply from the Midcontinent.
LEAP is the first among several Haynesville production-takeaway expansion projects to enter service in the early 2020s.
Midcoast Energy's 1 Bcf/d CJ Express Project, which reached a final investment decision in February, is scheduled to startup in early 2021, boosting gathering capacity in the Shelby Trough area of the Texas Haynesville with direct access to the Gulf Coast along a greenfield 107-mile, 36-inch diameter pipeline.
While Enable Midstream's Gulf Run project isn't scheduled to begin service until January 2023, the project should boost Haynesville production takeaway capacity by 1.65 Bcf/d, offering direct access to the Golden Pass LNG Pipeline at Starks, Louisiana. According to developers, Qatar Petroleum and ExxonMobil, the Golden Pass terminal should begin operations sometime in 2024.
The larger, 2 Bcf/d Haynesville Global Access Pipeline, which has been proposed by terminal developer Tellurian, has yet to reach a final investment decision. The project is tentatively scheduled for startup by mid-2023.