US regulators have given the go-ahead to pipeline operators Kinder Morgan and Williams to start up facilities that will boost the amount of available feedgas to serve Cheniere Energy's LNG export terminals in Louisiana and Texas.
The developments come as liquefaction ramps up at both facilities and Cheniere continues to prepare to ship its first cargo from the Texas site. The efforts are meant to grow its business amid a flurry of terminal projects that are nearing startup and more than a dozen others being actively pursued.
Together, the infrastructure stands to make the US a much bigger player in the global supply of LNG -- and increase competition for Cheniere and Dominion Energy, which are currently the only major US exporters of LNG produced from shale gas.
In separate orders Thursday, the US Federal Energy Regulatory Commission approved Kinder Morgan Louisiana Pipeline's request to start up remaining facilities on its Sabine Pass Expansion Project and Williams' Transcontinental Gas Pipe Line's request to start up certain facilities on its Gulf Connector Expansion Project.
The Sabine Pass Expansion (CP17-22) is designed to bring 600 MMcf/d of capacity to flow southbound on existing pipeline facilities in Louisiana from interconnects for delivery to Cheniere's export terminal in Cameron Parish. The Gulf Connector Expansion (CP16-494) is designed to provide about 475 MMcf/d of incremental firm transportation capacity from St. Helena Parish, Louisiana, to several interconnections, including with Cheniere Corpus Christi Pipeline in San Patricio County, Texas. The partial in-service, which Cheniere requested, will be able to provide the Texas terminal up to 290 MMcf/d of service on an interim basis along the full path of the project. LNG feedgas demand in the US has averaged nearly 4.3 Bcf/d over the last week, supported by more than 0.4 Bcf/d of gas delivered to the Cheniere terminal near Corpus Christi, which began liquefaction from Train 1 November 14. Two other trains are under construction there. On Friday, the unladen Golar Kelvin tanker was stationed in the Gulf of Mexico just offshore from the inlet that serves the terminal.
At the Sabine Pass terminal, meanwhile, Cheniere now has five liquefaction trains in operation. Train 5 began production at the end of October.
Since November 23, the Texas terminal has taken roughly 3.1 Bcf of feedgas, suggesting that the facility may be close to having enough LNG in its storage tanks to export its first cargo, S&P Global Platts Analytics data shows.
MARKET DEMAND
US LNG feedgas demand is expected rise to an average of roughly 4.8 Bcf/d through the remainder of the winter, peaking at 5.2 Bcf/d in March, Platts Analytics data shows. This incremental feedgas demand will be supported by higher utilizations at Sabine Pass T5 and Corpus Christi T1, as well as with the ramp up of commissioning fuel gas and feedgas deliveries to Kinder Morgan's Elba Island facility in Georgia and Sempra Energy's Cameron LNG T1 in Louisiana, both of which are expected to be placed into commercial service during the first half of next year.
The Sabine Pass Expansion Project called for replacing a meter station with a larger station in Acadia Parish, Louisiana, add a tap and lateral to connect to the export terminal in Cameron Parish, make changes to three delivery interconnects to allow receipts of gas as well as delivery, and add 15,900 horsepower of compression in Acadia Parish. It also entailed the addition of less than 1.5 miles of header pipeline to connect the compressor station to three existing pipeline interconnects. KMLP and Sabine Pass Liquefaction signed a precedent agreement for the full capacity of the project under a 20-year term, according to FERC's permit order in 2017 approving the project.
The target in-service date for the Gulf Connector Expansion Project had been January 1, but Cheniere's Corpus Christi Liquefaction, one of the two project shippers, requested startup sooner. The remaining capacity is expected to be available on the original schedule.
