Inaction at FERC is hampering a new Sendero Midstream Partners LP processing plant and contributing to unnecessary flaring of Permian Basin associated gas, the Houston-based midstreamer said in a recent filing.
Citing a drawn-out regulatory timeline, Sendero Carlsbad Gateway LLC urged the Federal Energy Regulatory Commission to issue a certificate for its proposed 23-mile, 24-inch diameter Permian natural gas pipeline as soon as possible. Further delays in authorizing the Carlsbad Gateway project, which would transport Permian associated gas between Eddy County, NM, and Culberson County, TX, will only contribute to additional flaring, harming both producers and the environment, the company said in a recent filing.
“Every day of continued delay in Commission action in this proceeding increases the hardship on Sendero and producers in the region,” the company said. “Delay in development of the needed Sendero pipeline contributes” to flaring associated gas volumes by producers, “an economic waste with adverse environmental consequences. Sendero stands ready to commence construction of the proposed pipeline, which will eliminate unnecessary flaring, as soon as the Commission acts.”
Sendero Carlsbad Gateway, a subsidiary of Sendero Midstream Holdings, filed for a FERC certificate last year and received a favorable environmental assessment for the intra-basin natural gas line in January. The company told FERC that its affiliate has already completed a $100 million processing plant designed to work in tandem with the Carlsbad Gateway line.
“Sendero lacks the residue gas takeaway capacity needed to support the full operation of its just completed new plant,” the company said. “As a result, both Sendero and its customers are adversely affected by the delay in Commission action.”
Rapid growth in production out of the Permian has contributed to transportation constraints and severely depressed (often negative) natural gas prices in the region. Estimates earlier this year had Permian gas flaring potentially exceeding 1 Bcf/d without the benefit of incremental takeaway. The next major natural gas takeaway line slated for service out of the Permian is Kinder Morgan Inc.’s 2 Bcf/d Gulf Coast Express, which has started commissioning and remains on track for a late September start-up.
Sendero is not the first Lower 48 pipeline developer to express frustration with inaction on FERC certificate decisions this year.
This summer, Dominion Energy Transmission Inc. canceled its Sweden Valley Project, telling FERC that it lost a customer after waiting months past its requested deadline for receiving a certificate of public convenience and necessity.
FERC has been split along party lines since last year, and the Commission’s handling of its pipeline reviews, including the consideration of climate impacts, has been a contentious topic. Long-time Democratic Commissioner Cheryl LaFleur is bidding farewell to her role at FERC this year. Her departure would restore a Republican majority on Commission votes.