Moss Lake Partners is throwing its hat in the ring to build the next big gas pipeline out of the Permian Basin after the Matterhorn project.
Moss Lake has started the pre-filing review process at the Federal Energy Regulatory Commission (FERC) for the DeLa Express pipeline. The proposed 690-mile pipeline would move up to 2 Bcf/d of gas from the Permian Basin into Louisiana. Founded by J. Alexander Blackman, Houston-based Moss Lake Partners is a private investor in midstream assets.
Moss Lake filed the project on April 2 for the 42-inch pipeline connecting Permian supply to Gulf Coast demand centers in Port Arthur, TX and Cameron Parish, LA. The project joins a list of pipeline proposals including Targa Resources’ (TRGP) Apex, Energy Transfer’s (ET) Warrior, and Kinder Morgan’s (KMI) brownfield 80 MMcf/d expansion of the Natural Gas Pipeline of America system (expected in-service date in November ’24).
Start-up of the Matterhorn Express Pipeline should alleviate severe gas egress constraints out of the Permian, at least for a window of time. Owned by a consortium including WhiteWater Midstream, Devon Energy (DVN), EnLink Midstream (ENLC) and MPLX, EDA expects linefill on the 2.5 Bcf/d Matterhorn line to begin in July ‘24, as reflected in the new Houston Ship Channel Supply and Demand and Permian Basin Supply and Demand Forecasts.
Which greenfield pipeline comes next remains to be seen. Unlike the Apex and Warrior proposals, DeLa Express would transport Permian natural gas across state lines to reach new LNG export projects in Louisiana. The superior access should prove attractive to shippers, though we expect the FERC review will add time to permitting.
DeLa Express also stands out from the pack as a proposal to move liquids-rich gas. Shippers could bypass processing constraints in the Permian by moving raw gas to the Gulf Coast and extracting NGLs closer to the Mont Belvieu fractionation market and export docks.
Persistent supply growth in the Permian means steady tension between producers’ need for more infrastructure and the investments required to service that growth. According to EDA’s Permian Basin Supply and Demand Forecast, Matterhorn temporarily puts that problem to bed for producers until late 2027.
Of course, distributing the huge volumes from Matterhorn further downstream will likely create more volatility in gas markets on the Texas Gulf Coast, as East Daley anticipates in the new Houston Ship Channel Supply and Demand Forecast. Given the long lead time required to permit, contract and build new large-scale projects, midstream companies now are negotiating the commercial contracts required to back financing for the next wave of projects.
In the proposed project schedule, Moss Lake requests that FERC certify DeLa Express by April 2026. The company is targeting an in-service date for the pipeline in July ’28. Moss Lake plans to hold an open house for interested shippers on DeLa Express in May or June. – Rob Wilson, CFA Tickers: DVN, ENLC, ET, KMI, MPLX, TRGP.
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