Infrastructure – Williams (WMB) has delayed the in-service date for its Louisiana Energy Gateway (LEG) pipeline following a legal dispute with Energy Transfer (ET). The delay of the 1.8 Bcf/d greenfield pipe could create an eventual mismatch as new LNG projects begin sevice in Texas and Louisiana, though East Daley’s new Southeast Gulf S&D Forecast does not anticipate any near-term constraints.
Speaking at the CERAWeek conference last week, Williams CEO Alan Armstrong confirmed LEG start-up would be delayed from 4Q24 until the second half of 2025. WMB has not set a revised date, but was able to re-route the segment of the pipeline at dispute with ET, Armstrong said.
And while East Daley hasn’t heard anything definitive, Momentum Midstream’s NG3 pipeline could also be delayed from an expected 3Q24 start in the Haynesville.
Both companies are tangled up in lawsuits with Energy Transfer regarding the use of ET’s established rights-of-way to lay the new pipelines. ET argues that its competitors should not be allowed to piggyback off its rights-of-way.
However, based on EDA’s estimates for start-up of the Plaquemines and Golden Pass LNG projects, we see sufficient egress capacity on Gulf Run and LEAP to meet new demand. We expect Venture Global to start Plaquemines LNG in 4Q24, and ExxonMobil (XOM) to begin operations at Golden Pass in 1Q25. Our regional outlook for supply, demand and pipeline capacity is available in the new Southeast Gulf S&D Forecast.
In the near term, greenfield projects like LEG or Momentum’s NG3 aren’t needed to supply Golden Pass and Plaquemines Phase 1, according to our model. However, as those LNG facilities ramp to full capacity by 2026, new pipelines will need to be built. Gulf Run, LEAP and NG3 have all guided to potential expansions totaling up to 3.5 Bcf/d.
Check out East Daley’s new Southeast Gulf S&D Forecast for more details regarding pipeline flows and potential constraints in Louisiana and East Texas.
Infrastructure – The Waha hub in West Texas continues to trade at negative prices this week as pipeline maintenance work creates takeaway constraints for some Permian Basin gas.
Kinder Morgan’s (KMI) El Paso Natural Gas has been undergoing maintenance on its North Mainline since the beginning of March. The pipeline expects the work to continue through April, according to El Paso’s preliminary maintenance schedule.
In addition, Gulf Coast Express (GCX) plans to conduct maintenance on compressors in April and May, which will add to price woes for Permian producers. The work will reduce capacity on GCX to 1.63 Bcf/d from April 9 to May 2, and to 1.86 Bcf/d from May 14-21. GCX can move up to 2 Bcf/d of gas at normal operations. Waha was trading -$2.34 behind Henry Hub as of March 26.
Storage – Traders expect the Energy Information Administration (EIA) to post a -30 Bcf storage withdrawal for the week ending March 22. Working gas inventories would decrease to ~2,302 Bcf, in line with East Daley’s forecast in the monthly Macro Supply and Demand Forecast.
The upcoming EIA report is likely to show storage returning to withdrawal mode after the agency posted a 7 Bcf injection for the March 15 week. That represented only the third weekly storage injection to occur as early as mid-March, according to historical EIA storage data starting in 2010, underscoring the loose market balance. A survey by The Desk shows a range of estimates for a -12 to -48 Bcf withdrawal for Thursday’s report.
Working gas currently totals 2,332 Bcf, or 678 Bcf above the 5-year average, the largest surplus in historical EIA storage data. East Daley’s latest Macro Supply and Demand Forecast predicts storage inventory will exit the winter withdrawal season at 2,302 Bcf, or 673 Bcf above the 5-year average.
Rigs - US rigs fell by 7 W-o-W to bring the total count to 592 for the March 17 week. The Permian lost 3 rigs while the Anadarko, DJ and Eagle Ford are each down 2 rigs W-o-W. The Bakken is up 1 rig.
On the midstream side, Enterprise Products (EPD) lost 5 rigs on its Permian and ArkLaTex systems. Energy Transfer (ET) is down 6 rigs with losses in the Permian and ArkLaTex. We are checking the past month of historical allocations for ET and EPD in the Permian Basin. Targa Resources (TRGP) is up 2 rigs with additions on its Permian systems. EnLink Midstream Partners (ENLC) gained 2 rigs on its 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.