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Gotta Get Over, Part 5 - The Race to Debottleneck Louisiana Feedgas Routes: Pre-FID Projects

New U.S. LNG export projects battling rising labor and equipment costs and/or financing woes have one more thing to worry about that the first wave of projects didn’t: ensuring the feedgas supply will be there when they need it. Bottlenecks have already developed for moving natural gas volumes to the Louisiana coast, where the bulk of future export capacity will be sited. As more liquefaction capacity is built out and more export projects are greenlighted, a lot more pipeline capacity will be needed to move feedgas supply from the Haynesville and other supply basins into southern Louisiana and across 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 announced-but-yet-to-be sanctioned greenfield pipeline expansions, along with an update on their associated export projects.

As we said in Part 1, there are nearly 30 LNG export projects we track in our LNG Voyager report that are jockeying for a piece of the global gas market. Of those, five are under construction or greenlighted for the northwestern 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 inching closer to securing the necessary financing and/or offtake commitments and are likely to take financial investment decisions (FIDs) in the next year, as well as others that are at various stages of regulatory approvals and financing/offtake agreements but still may get done. The expected onslaught of gas demand from these projects, particularly along the Louisiana coast and the increasingly constrained pipeline system in the region, has raised concerns about worsening supply-demand imbalances as new liquefaction capacity comes online. That, in turn, has driven a slew of pipeline project announcements from LNG developers and pipeline companies to ensure the supply will be there when and where it’s needed.

To understand how the second wave of LNG export projects will shape the Louisiana gas market in the coming years, we’ve been delving into the recently completed and future pipeline expansions targeting export demand. In Part 1 of this series we highlighted recently completed pipeline expansions, including Louisiana Xpress and Alberta Xpress on TC Energy’s Columbia Gas Transmission (TCO) and ANR Pipeline systems, Kinder Morgan’s Acadiana 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 southwestern Louisiana, including projects that will debottleneck north-to-south pipeline capacity within the state, most of which would bring incremental supply to the Gillis, LA, area. In Part 3 and Part 4, we turned our attention to projects that are moving forward for increasing feedgas supplies in southeastern Louisiana, including for the first LNG export facility to take FID in that area: Venture Global’s (VG) Plaquemines LNG. That brings us to today’s focus: the final category of feedgas-related pipeline projects — ones that were announced but have yet to be sanctioned, primarily pending FIDs for the related export projects themselves.

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