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Total, Chevron Secure Pipeline Capacity for Cheniere LNG Project

Total Gas & Power North America Inc. and Chevron Global Gas have signed binding precedent agreements for 100% of the initial capacity for a term of 20 years on the proposed $490 million the Kinder Morgan Louisiana Pipeline, Kinder Morgan Energy Partners LP (KMP) said last week. As proposed, the pipeline will provide 3.2 Bcf/d of takeaway capacity from the Cheniere Sabine Pass liquefied natural gas (LNG) plant now under construction in Cameron Parish, LA (see NGI, March 14).

Total and Chevron were awarded all of the capacity in KMP's recent open season (see NGI, Sept. 26).

The KMP project involves construction of a new interstate natural gas pipeline that will provide 3.2 Bcf/d of takeaway capacity from the Cheniere Sabine Pass liquefied natural gas (LNG) plant now under construction in Cameron Parish, LA. As designed, the 137-mile pipeline would extend to Evangeline Parish, LA, and interconnect with various interstate and intrastate pipelines.

"We are pleased that Total and Chevron have chosen to participate as anchor shippers on the Kinder Morgan Louisiana Pipeline project, which will play an important role as America looks to LNG to help meet its future energy needs," said KMP CEO Richard D. Kinder. "The transportation of regasified LNG is one of the megatrends we are actively pursuing and this project represents an exciting growth opportunity for Kinder Morgan."

The new pipeline will consist of two segments: a 137-mile large-diameter pipeline with firm capacity of about 2.0 Bcf/d connecting to various interstate and intrastate pipelines within Louisiana; and a one-mile pipeline with firm capacity of about 1.2 Bcf/d connecting to Natural Gas Pipeline Company of America (NGPL), a subsidiary of Kinder Morgan Inc.

As a new interstate pipeline, the Kinder Morgan Louisiana Pipeline will be subject to Federal Energy Regulatory Commission jurisdiction. Depending on regulatory approvals, the new pipeline is expected to be in service as early as the first quarter of 2009.

"This agreement is key to advancing Chevron's effort to provide the U.S. market with new sources of natural gas, and is a significant step forward in our overall strategy of building complete gas value chains," said John Gass, president of Chevron Global Gas.

"This pipeline, combined with our capacity in the Sabine Pass LNG terminal, will allow us the unique opportunity to flexibly link all key consuming markets east of the Rockies with Chevron's LNG projects," said Randy Curry, president of Chevron Natural Gas.

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