The Daley Note: October 13, 2022
DT Midstream (DTM) is targeting two Haynesville-Gulf Coast capacity expansions set to handle expected LNG demand growth during the next two years.
DTM will add 0.5 Bcf/d of new capacity on its Blue Union gathering system in the Haynesville that will come online in increments by YE22. Blue Union is 343 miles of dry gas gathering lines in northwestern Louisiana feeding up to 2.0 Bcf/d to DTM's LEAP lateral and other pipelines delivering to the Louisiana Gulf Coast. Additionally, LEAP's Phase II expansion has reached a final investment decision (FID). The project will bring takeaway capacity to 1.7 Bcf/d and provide easy access to Gulf Coast liquefaction facilities.
According to Energy Data Studio, Southwestern (SWN) is the major producer on Blue Union. The E&P bulked up by acquiring Indigo Natural Resources in 2021, consolidating the system's counterparties. We model volumes are flat currently, though we expect production to increase as SWN rigs come online with the Blue Union expansion (matching company guidance).
In 2Q21, DTM announced 150 MMcf/d of contracts with Rockcliff, Comstock Resources (CRK) and Tellurian (TELL). Rig counts have fallen from 7 rigs in February to just 2 rigs in September, according to our Midstream Activity Tracker, but East Daley forecasts the system to average 6 rigs by 1Q23. We will review the outlook for Blue Union and other company assets in our upcoming DTM 3Q22 Earnings Preview - Oren Pilant Tickers: CRK, DTM, SWN, TELL.
3Q22 Earnings Previews Now Available
East Daley has published a first group of 3Q22 Earnings Previews and Blueprint Financial Models for midstream companies within our coverage. Quarterly Earnings Previews and Blueprints are now available for Antero Midstream (AM), Crestwood Equity (CEQP), EnLink Midstream (ENLC), Enterprise Products (EPD), Equitrans Midstream (ETRN), Kinder Morgan (KMI), Magellan Midstream (MMP), Plains All American (PAA), Summit Midstream (SMLP) and Targa Resources (TRGP). Our Earnings Previews include quarterly earnings forecasts compared to Street consensus, a detailed list of the top assets that will impact the quarter, analysis of near- and long-term risks to future earnings, along with forecasts for Adj. EBITDA by segments. Please log in to access these reports.
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