Gillis Lateral completes in-service, connecting Haynesville production and LNG terminals

Enterprise Products Partners recently began commercial service on its new Gillis Lateral pipeline and the related expansion of the existing Acadian Haynesville Extension system, the company said Dec. 15.

The 80-mile Gillis Lateral starts near Alexandria, Louisiana, and brings gas to third-party interconnects near Gillis, including several pipelines that directly supply LNG export facilities along the Louisiana Coast.

The project adds around 1 Bcf/d of additional pipeline capacity that connects robust Haynesville production with burgeoning LNG feedgas demand, and is fully subscribed with long-term, firm commitments.

In addition to the Gillis Lateral, Enterprise completed work on its Acadian Haynesville Extension pipeline. The company upgraded Mansfield compressor station, which increased the pipeline's capacity by around 300 MMcf/d to 2.1 Bcf/d.

"By leveraging the flexibility of our Acadian system, Enterprise is providing natural gas producers in the growing Haynesville shale, one of the most lucrative natural gas plays in the U.S., with access to the higher valued global LNG market," Natalie Gayden, senior vice president of natural gas assets at Enterprise Products, said in a Dec. 15 statement.

Pipeline nomination data collected by S&P Global Platts Analytics show that the flows began on the new infrastructure Dec. 1, with Creole Trail, Transcontinental Gas Pipe Line, and Cameron Pipeline collectively receiving around 840 MMcf/d from the Acadia Gas System Dec. 1-15 from meters that previously had no flows.

Cheniere's Creole Trail Pipeline has received the bulk of deliveries from the new Gillis Lateral so far, averaging 470 MMcf/d for Dec. 1-15, which was counterbalanced by lower receipts from Texas Eastern and Trunkline Gas.

Transcontinental Gas Pipe Line received the next highest, averaging 320 MMcf/d in receipts, while Cameron Pipeline has received approximately 50 MMcf/d from the Acadia Gas System Dec. 1-15.

The additional capacity linking supply with demand comes at a key moment of strength for both Haynesville production and LNG feedgas demand.

Gas production in the Haynesville Shale ramped up this year to new heights, Platts Analytics data shows. Year to date, Haynesville production averaged 13.1 Bcf/d, up 1 Bcf/d from 2020. In recent months, daily Haynesville production has frequently surpassed 14 Bcf/d, with a record-high of 14.2 Bcf observed Nov. 20.

Similarly, LNG feedgas demand is on track to have its strongest month on record, averaging 11.8 Bcf/d Dec. 1-15. This has been driven in part by strong gas import demand in Europe and South America. With Venture Global's Calcasieu Pass LNG export facility in Cameron Parish, Louisiana expected to enter commercial service in early 2022, the outlook for Gulf Coast LNG feedgas demand looks likely to continue to be bright.