Midstream eyes adding Haynesville, Gulf Coast gas delivery capacity on bright LNG demand prospects

Strong demand for LNG terminal feedgas continues to drive pipeline ambitions to deliver more natural gas to the US Gulf Coast, the latest being a greenfield and a brownfield project proposed by Enbridge.

Enbridge's Texas Eastern Transmission announced a non-binding open season for two pipeline expansions that comprise its Louisiana Gulf Coast Expansion Project(s). The open season will run May 16-June 3.

The possible system expansions include a greenfield pipeline lateral that would move gas south from the Haynesville and a brownfield expansion of Texas Eastern's 30-inch mainline between Vidor in Texas and Kosciusko in Mississippi. The brownfield mainline expansion project would specifically target both westbound flows from Gillis to Vidor compressor station in the pipeline's WLA zone and eastbound flows from Gillis to its New Roads compressor station in the ELA zone.

Gillis has emerged as a key hub for Haynesville gas volumes flowing south to Gulf Coast demand. The southwest Louisiana location is just north of Cameron and Calcasieu Pass liquefaction and export facilities, as well as Tellurian's proposed Driftwood LNG.

In addition to Texas Eastern's proposed greenfield expansion, a number of other existing or future pipelines will also deliver gas to Gillis from the Haynesville. DT Midstream's LEAP Gathering Lateral Pipeline, a 1 Bcf/d, 155-mile pipe gathers gas from across the Haynesville and delivers to Gillis Hub. Energy Transfer's Gulf Run gas pipeline, which is under construction and expected to enter service by the end of 2022, has a proposed Gillis Lateral.

LNG feedgas demand

Growing Gulf Coast LNG demand is a driving force for midstream expansions in Louisiana and East Texas.

"We see significant LNG export demand potential with growing domestic demand," Texas Eastern spokesman Michael Barnes said in a May 18 email about the midstream operator's proposed expansions.

Prospects for new US LNG export projects have brightened in recent months, as European gas buyers seek to transition away from Russian pipeline imports. Even before the increased interest from European importers, gas buyers in Asia had driven the development of US LNG export projects, with offtakers in China signing a series of long-term contracts with proposed US export facilities over the last six months.

Data from S&P Global Commodity Insights shows that US LNG feedgas demand has averaged 12.4 Bcf/d year-to-date, up from 10.6 Bcf/d during the corresponding time in 2021.

Enbridge is not alone in testing the waters for shipper interest in this region.

Midstream infrastructure company Williams has also proposed a brownfield expansion and a greenfield pipeline in the Gulf Coast states. The company's brownfield expansion, Texas to Louisiana Energy Pathway, would increase Texas-to-Louisiana capacity on Transcontinental Gas Pipeline by 364 MMcf/d. Williams executives said in a May 3 earnings call that this expansion project had received sufficient long-term transportation commitments to move forward, with an expected in-service of Q4 2025.

Williams' proposed greenfield pipeline, Louisiana Energy Gateway, would move up to 1.8 Bcf/d of gas south out of the Haynesville. The midstream operator has secured long-term transportation commitments for "over half" of the proposed pipeline's capacity, Williams' Senior Vice President of Corporate Strategic Development Chad Zamarin said May 3.

Certified gas corridor

Proposals to build greenfield pipelines to move gas south from the Haynesville could also help midstream companies tap into the growing certified gas market.

As of May 19, operators in the Haynesville have committed to certifying just over 7 Bcf/d of gas production by the end of 2022, according to company announcements. Based on year-to-date production of 13.6 Bcf/d, 53% of the basin's gas production will be certified by the end of the year.

Satellite-driven methane intensity data from S&P Global Commodity Insights shows that the Haynesville might have a natural advantage in emissions compared with other basins. Out of 19 US gas production areas assessed as of May 18, the ARKLA-Haynesville and East Texas-Haynesville placed in the top three for lowest methane intensities.