Infrastructure – Venture Global’s Plaquemines LNG has started receiving natural gas, marking an important milestone for the LNG project under construction in southeastern Louisiana.
On April 23, the Federal Energy Regulatory Commission (FERC) granted Venture Global approval to place into service Phase II of the Gator Express Pipeline, the LNG header pipeline for Plaquemines LNG in Pointe Coupe Parish, LA.. The new interconnect began flowing on Wednesday (April 24) at a rate of ~50 MMcf/d from Texas Eastern Transmission’s (TETCO) Southwest Lateral.
Gator Express is comprised of two co-located pipeline laterals, both with a capacity of ~1.9 Bcf/d. Phase 1, which has receipt interconnects with TETCO and Tennessee Gas Pipeline, has encountered unexpected delays.
The start of gas flows comes nearly three weeks after TETCO received the go-ahead from FERC to start service on its own project, the Venice Lateral extension, connecting to Gator Express. The 36-inch Venice Lateral runs three miles from TETCO’s Line 40 and replaces an existing 2.2-mile segment. TETCO also constructed a greenfield compressor station in Pointe Coupe Parish to replace two existing compressors in Iberville and Lafourche parishes. The new line will have a maximum capacity of 1.26 Bcf/d from TETCO’s Louisiana mainline to feed Gator Express.
Plaquemines is part of the next LNG project wave set to transform the US natural gas market through 2030. East Daley tracks Plaquemines LNG and other projects in the new Southeast Gulf Supply and Demand Forecast. The figure shows our forecast for pipeline flows in the southeastern Louisiana sub-region.
The Plaquemines project appears to be progressing ahead of schedule. At CERAWeek in March, Venture Global announced that Plaquemines would begin taking gas sometime in June, with first LNG expected this summer. East Daley forecasts Phase 1 of Plaquemines LNG Ph1 (2.25 Bcf/d) to ramp to full capacity by 2Q25.
Flows – Freeport LNG is back online as of April 21, ending a 10-day period when flows to the facility fell close to zero.
Since Sunday, Freeport has received between 0.5 to 1.0 Bcf/d, according to pipeline samples. However, East Daley does not expect Freeport to return to full capacity (~2 Bcf/d) until May.
On April 10, the company submitted a report to the Texas Commission on Environmental Quality (TCEQ), citing a trip at its Train 3 due to an issue with the ventilation flow meter. The trip likely caused the weeklong production outage at the Texas LNG facility.
Freeport LNG has had a rocky start to 2024. Volumes fell over 0.5 Bcf/d in the second half of January following electrical issues caused by Winter Storm Heather. The company reported the motors driving the refrigeration compressors in Train 3 needed replacement, and expected the train to be offline through the last week of February. In early March, another train went down, and Freeport announced that it expected to continue maintenance work through May.
Infrastructure – Mountain Valley Pipeline (MVP) plans to start facility operations by May 23, according to a request filed with the Federal Energy Regulatory Commission (FERC).
MVP filed with FERC on Aprill 22 requesting approval to place facilities in service no later than May 23. In the filing, the pipeline states that minimum volume commitments (MVCs) with shippers are expected to commence June 1.
The timeline laid out by MVP means the long-delayed project may actually meet recent guidance by developer Equitrans Midstream (ETRN) to have MVP operational by the end of May 2024.
In the FERC filing, MVP reported that it has completed all waterbody and wetland crossings across the project and expects all remaining segments to be welded by early May. MVP predicted that all facilities will be mechanically complete by May 22, 2024.
While MVP can move up to 2 Bcf/d, EDA forecasts MVP will only run ~750 MMcf/d on average in 2024 due to downstream constraints at Transco Zone 5. These constraints will only be alleviated in 2027 when Transco debottlenecks downstream with their Southeast Supply Enhancement expansion.
Storage – Traders and analysts expect the Energy Information Administration (EIA) to report a net injection of 82 Bcf into working gas storage inventories for the week ending April 19. Inventories would rise to 2,415 Bcf, in line with our forecast in the monthly Macro Supply and Demand Forecast. An injection of this size would increase the surplus to the 5-year average by 23 Bcf, to 645 Bcf. The surplus to last year would stand at 406 Bcf.
Based on market estimates, the upcoming EIA report would be the first of the nascent injection season to exceed the 5-year average injection rate. Looking forward, this could be one of a handful of weeks in the spring shoulder months where demand is low enough to allow excess gas to go into storage.
In the latest Macro Forecast, East Daley estimates a total storage build of 1,510 Bcf this injection season (April-October), or ~3.0 Bcf/d less than last year due to lower production. Additionally, the National Weather Service (NWS) released its most recent temperature forecast calling for a hot summer ahead. The agency predicts above-average temperatures from June to August, which should stoke greater need for gas-fired power. Assuming normal weather, East Daley expects summer power burn to average a record 38.4 Bcf/d; warmer-than-normal weather could push this average up.
Rigs – The US rig count fell by 3 W-o-W to bring the total count to 577 for the week ending April 14. The Anadarko, ArkLaTex and Marcellus+Utica each gained 1 rig. The Permian and Denver-Julesburg basins lost 3 rigs. The 3 rig lost in the DJ are likely due to rig moves and should recover next week.
On the midstream side, MPLX is up 3 rigs with gains on its Permian and Marcellus+Utica systems. Western Midstream (WES) gained 3 rigs on its Eagle Ford and Permian systems. Energy Transfer (ET) is down 3 rigs total with losses on its Eagle Ford and Permian systems.
East Daley’s weekly Midstream Activity Tracker monitors rig activity by basin and gathering and processing (G&P) system to better understand midstream impacts. We allocate rigs and monitor flows through 150+ public and privately owned G&P systems in every North American basin. Reach out for more information on the Midstream Activity Tracker.
