GOLDEN PLANS
Enable Midstream signs 20-year supply agreement with export terminal
Enable Midstream Partners' plans to build a pipeline from northern Louisiana to Texas' Gulf Coast were made golden Tuesday.
Golden Pass Products LLC, jointly owned by Qatar Petroleum and ExxonMobil, announced plans to build a liquefied natural gas export terminal worth more than $10 billion at the location where it already operates the Golden Pass LNG import facility, in Sabine Pass, Texas.
That's important to Enable Midstream because its Gulf Run Pipeline, which the Oklahoma City company's officials announced plans to build in September, will provide the export terminal with a substantial quantity of the natural gas it will need for at least the first 20 years the export terminal operates.
The firms on Tuesday signed documents putting that supply agreement in place.
Enable Midstream officials have said the Gulf Run Pipeline would be 171 miles long, capable of carrying at least 1.1 billion cubic feet of natural gas per day from northern Louisiana to the Gulf Coast.
Officials said the pipeline's northern end would be connected to Enable Gas Transmission's existing pipeline network, which will allow Enable Midstream to supply it with natural gas generated by producing wells in the Haynesville, Marcellus, Utica and Barnett Shale fields, as well as other producing wells in the country's Mid-Continent region.
While Enable Midstream still must clear federal approval requirements before the Gulf Run Pipeline can be built, its leadership anticipates
the company will be able to place the line into service in late 2022. They also continue to visit with other potential shippers and customers and could expand the pipeline's capacity in the future.
Enable Midstream CEO Rod Sailor said Tuesday the company had “a high degree of confidence” that Golden Pass Products would proceed with its plans to build the export facility.
Sailor stressed that Enable Midstream's plans for Gulf Run Pipeline were customer driven and that it secured its deal with Golden Pass Products in large part because its configuration provides the export terminal
with a diverse and reliable supply.
“We are excited to partner with a top-tier customer such as Golden Pass,” Sailor said. “Qatar Petroleum and ExxonMobil are proven global leaders in producing, shipping and marketing natural gas worldwide, and we look forward to providing Golden Pass unrivaled market access to diverse natural gas supply sources.”
Golden Pass already has obtained needed clearances from federal regulators to build and operate the terminal, officials said. Construction on the facility, which will have an annual export capacity of 16 million tons of LNG, is expected to begin later this quarter and will take about five years to complete.
Golden Pass' export terminal project will incorporate three of the import
facility's existing LNG storage tanks, two ship berths and a supportive pipeline network that hooks it into natural gas distribution systems along the Gulf Coast.
A spokesman for Golden Pass said Tuesday changing global market conditions have made that possible, given that today's more profitable business plan is to export the product overseas.
Golden Pass expects work to build the export terminal will support about 9,000 construction jobs and more than 200 permanent jobs once the facility is operational.
According to a preliminary independent study, the project is expected to generate up to $31 billion in U.S. economic gains and $4.6 billion in taxes for the United States at local, state and national levels.
Additionally, the project contemplates the addition of compressor stations to the existing pipeline to facilitate receipt and redelivery of 2.6 billion cubic feet per day of natural gas supply to the facility.
Besides Enable Midstream, Golden Pass LNG also will take natural gas from another major natural gas supplier.
Enable owns and operates more than 13,500 miles of natural gas and crude oil gathering pipelines, about 2.6 billion cubic feet per day of processing capacity, about 7,800 miles of interstate pipelines, about 2,200 miles of intrastate pipelines and eight storage facilities that can hold 86 billion cubic feet of product.
“Our agreement with Enable Midstream is a key component in securing transportation for our export facility's natural gas supply,” said Sean Ryan, president of Golden Pass Products. “Golden Pass looks forward to a long- term relationship with Enable Midstream as we progress with our LNG export facility.”