New U.S. LNG export projects struggling with rising labor and equipment costs and/or financing issues have one more thing to worry about that the first wave of projects didn’t: ensure that the feed gas supply will be there when they need it. Bottlenecks have already developed to move volumes of natural gas to the Louisiana coast, where most of the future export capacity will be located. As more liquefaction capacity is built and more export projects are given the green light, much more pipeline capacity will be needed to move feed gas supplies from Haynesville and other supply basins in southern Louisiana and through the last mile to the terminals. In today’s RBN blog, we conclude our roundup of pipeline expansions in the Bayou State that would help ease transportation constraints and balance the market, this time with a look at pipeline expansions that have been announced but have not yet been sanctioned, along with an update on their associated export projects.
As we said a Part 1there are nearly 30 LNG export projects that we follow in our own LNG Voyager report that they are fighting for a share of the global gas market. Of these, five are under construction or greenlit for the northwest corner of the Gulf Coast from the Beaumont/Port Arthur, TX area to the Mississippi River. There are more that have their regulatory approvals and are close to securing the necessary funding and/or procurement commitments and are likely to make financial investment decisions (FIDs) in the coming year, as well as others are in various stages of regulatory approval. and financing/acquisition deals, but they can still be done. The expected onslaught of gas demand from these projects, particularly along the Louisiana coast and the region’s increasingly constrained pipeline system, has raised concerns about worsening supply-demand imbalances. demand as new liquefaction capacity is introduced. This, in turn, has prompted a flurry of pipeline project announcements by LNG developers and pipeline companies to ensure supply is there when and where it is needed.
To understand how the second wave of LNG export projects will shape Louisiana’s gas market in the coming years, we’ve been digging into recently completed and future pipeline expansions targeting export demand. In Part 1 in this series we highlighted recently completed pipeline expansions, including the Louisiana Xpress and Alberta Xpress on TC Energy’s Columbia Gas Transmission (TCO) and ANR Pipeline systems, Kinder Morgan’s Acadian expansion of its Louisiana system, and Energy Transfer’s Gulf Run Transmission. In Part 2, we turned to recently sanctioned pipeline expansions targeting export demand in Southwest Louisiana, including projects that will reduce pipeline capacity from north to south within the state, most of which would bring a incremental supply in the Gillis, LA area. In Part 3 i Part 4we focused our attention on projects that are moving forward to increase the supply of feed gas South East Louisiana, including the first LNG export facility to take FID in this area: Venture Global (VG) LNG mines.. This brings us to today’s focus: the final category of pipeline projects related to feed gas, those that were announced but not yet sanctioned, mainly pending FIDs for the same related export projects.
