Boardwalk Pipeline Partners LP’s Gulf South Pipeline Co. LP is planning a Gulf Coast supply header and a legacy system expansion to serve Freeport LNG Development LP’s liquefied natural gas (LNG) export terminal near Freeport, TX.
The pipeline has struck 20-year firm transportation agreements to carry 1.4 Bcf/d to serve the first two trains of the LNG terminal and is seeking more capacity takers. Gulf South plans to construct a 65-mile supply header (Coastal Bend Header) to serve the terminal and plans to expand and modify existing facilities to access additional supply sources for the header with an anticipated start date in 2018.
The project would entail construction of about 65 miles of 36- and/or 42-inch diameter pipeline supply header, which would begin at an interconnect with Tennessee Gas Pipeline Co. LLC eight miles northwest of Hungerford, TX, in Wharton County, and terminate in Brazoria County, TX, at the existing Stratton Ridge meter site near Clute, TX, for delivery into the Freeport terminal. In addition, Gulf South plans to expand its existing mainline system and provide primary and supplemental receipt points to supply the header and/or other new or existing delivery points near the header.
Shippers on the header would be able to source gas from several third-party pipelines directly connected to the header and access gas storage facilities within the region. Storage fields that would be either directly or indirectly accessible include Tres Palacios Storage, Katy Storage and Enterprise Products Partners’ Wilson Storage. The Boardwalk-owned Bistineau and Petal storage fields are also indirectly accessible to the Coastal Bend Header, Boardwalk spokesman Joe Hollier told NGI.
“Boardwalk’s pipeline network is well-suited to deliver to growing markets in the Gulf Coast,” said Gulf South’s John Haynes, chief commercial officer. “We…are located near, or attached to, many natural gas shale supply sources including the Eagle Ford, Barnett, Haynesville, Cana-Woodford, Fayetteville, Marcellus and Utica; and over time, Gulf South’s Perryville Exchange will become a meaningful hub for producers, end-users and LNG off-takers to trade volumes.”
The overall project’s initial design and rate structure were determined by Gulf South’s successful participation in a competitive bid process sponsored by a group of shippers that have struck one or more binding precedent agreements obligating them to enter into both header and legacy firm transportation service agreements for at least 20 years. The binding agreements support constructing the header and legacy expansion at an initial header capacity of between 1.3 and 1.54 million Dth/d, Boardwalk said.
“The project was designed to provide access to multiple shale plays to enhance gas supply optionality,” Hollier said. “Through the Perryville Exchange, shippers would have access to shale plays located near Gulf South as well as shale plays on other pipelines, such as the Midcontinent basins and Marcellus/Utica. It is difficult to tell how the foundation shippers will ultimately contract for their gas supply.”
The pipeline is holding a binding open season through Oct. 10 for additional capacity on the supply header and the expansion of its legacy system, in addition to the 1.4 Bcf/d subscribed by the project’s foundation shippers. For information, visit www.gulfsouthpl.com and select “informational postings, non-critical.”
The project is subject to board and regulatory approvals as well as a final investment decision by Freeport LNG on the terminal. The Federal Energy Regulatory Commission approved the Cheniere Energy project in July (see Daily GPI, July 31), and Commission authorization to begin construction is expected soon.
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