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Tellurian seeks early review at FERC for 625-mile Permian gas pipeline

Highlights

In-service eyed for H2 2023, H1 2024

Project would reach from Waha Hub to southwest Louisiana

Pitch at FERC highlights reduction in flared gas

Washington — Tellurian on Tuesday asked federal regulators for permission to start early review stages for a 625-mile, 42-inch-diameter natural gas pipeline project that would run from the Waha Hub in West Texas to Gillis in southwest Louisiana.

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The 2.3 Bcf/d Permian Global Access Pipeline project would link burgeoning Permian Basin production to the fastest growing US gas market, in Southwest Louisiana, where petrochemical, industrial and LNG export demand is rising, the developer said in the request for pre-filing review at the Federal Energy Regulatory Commission.

The project is one of several pipelines Tellurian has proposed to link prolific shale gas production with US Gulf Coast markets and the developer's planned Driftwood LNG export terminal in Lake Charles, Louisiana.

In-service for PGAP is targeted for the second half of 2023 or the first half of 2024. The company anticipates filing a complete application at FERC in October 2020, with the goal of receiving certificate approval around mid-2022.

In its request to enter pre-filing, Tellurian stressed economic benefits of providing an outlet for associated gas resulting from production of crude oil.

Click here for full-size image

ENVIRONMENTAL EMPHASIS

At a time when climate considerations increasingly have been a source of contention and litigation for natural gas projects reviewed by FERC, Tellurian also stressed environmental benefits of the project.

"Of critical importance to the Permian Basin, all of Texas and Louisiana and globally, PGAP will facilitate the reduction of venting and flaring of natural gas and will continue to foster the displacement of burning fuel oil and coal for fuel, via switching to natural gas," it said. The project would deliver 2.3 Bcf/d of gas that would otherwise be vented or flared, reducing greenhouse gas emissions and particulate emissions.

Tellurian also flagged royalty payments to mineral owners and landowners, stating gas will complement alternative energy development, and suggested the connecting infrastructure would help stabilize gas prices.

In addition to the pipeline, the project would entail six compressor stations in Texas, totaling 355,000 hp, and up to 22 meter stations whose locations have not yet been determined.

Along with the PGAP project, Tellurian's proposed pipeline network consists of the 4 Bcf/d Driftwood Pipeline and the 2 Bcf/d Haynesville Global Access Pipeline. Tellurian is also considering developing the 180-mile Delhi Connector Pipeline, which would connect the Perryville Hub in Richland Parish, Louisiana, to Gillis with at least 2 Bcf/d. The Driftwood Pipeline received FERC approval in April, as did the Driftwood LNG terminal.

PERMIAN BUILDOUT

The new pre-filing request comes as three major Permian takeaway projects totaling 6 Bcf/d have reached a final investment decision within the past two years, including two Kinder Morgan projects -- the 2 Bcf/d Gulf Coast Express and the 2 Bcf/d Permian Highway Pipeline -- and the 2 Bcf/d Whistler Pipeline, a joint venture project.

Once those projects are completed, the Permian Basin could be unconstrained through 2024, according to S&P Global Platts Analytics.

The anticipated buildout could add downside risk to a fourth takeaway project reaching FID in the near term. Another five Permian takeaway pipelines have been pitched with a combined capacity of about 10 Bcf/d: Sempra's Permian to Katy Pipeline (2 Bcf/d, in-service date third-quarter 2020), Williams Bluebonnet Pipeline (2 Bcf/d, ISD Q4-20), NAmerico Partners' Pecos Trail Pipeline (2 Bcf/d, ISD Q2-21), PGAP and Kinder Morgan's Permian Pass (2 Bcf/d, ISD to be decided). PGAP and Permian Pass may benefit by terminating near LNG facilities in Louisiana, bypassing potential constraints. Pecos Trail previously has said it anticipates FID in the third quarter.

By the end of 2024, LNG export demand is expected to reach 9 Bcf/d in the Southeast, with additional 5.8 Bcf/d expected in Texas, according to Platts Analytics.

-- Maya Weber, Emmanuel Corral, newsdesk@spglobal.com

-- Edited by Brandon Evans, newsdesk@spglobal.com

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