One day after disclosing that CEO Meg Gentle had departed the company, Tellurian Inc. on Tuesday withdrew from FERC’s review a proposed 2.3 Bcf/d Permian Basin natural gas artery that would have moved supply to the Louisiana coast.
The Permian Global Access Pipeline (PGAP) had been under the microscope by Tellurian for months as it coped with a declining outlook for liquefied natural gas (LNG) exports brought on in part by Covid-19.
Tellurian earlier this year delayed until 2021 a decision whether to sanction the long-proposed Driftwood LNG export terminal planned for Louisiana.
In the letter to the Federal Energy Regulatory Commission, PGAP officials asked to withdraw the pipeline project from the National Environmental Policy Act (NEPA) pre-filing review process (No. PF19-9-00).
“PGAP continues to believe that in time the proposed project will provide significant benefits,” the letter signed by President Joey Mahmoud stated.
“However, with the arrival of the Covid-19 pandemic, ensuing collapse of the domestic and global energy commodity prices, reduced consumption and the addition of alternative transportation solutions out of the Permian Basin, PGAP has re-evaluated the project’s need and has determined that current market conditions do not support the economic thresholds to pursue the project further at this time.”
The NEPA review had begun last year for the proposed 42-inch diameter pipe. As designed, PGAP would traverse 625 miles through 24 Texas counties and four Louisiana parishes. During the course of the pre-filing, PGAP noted it held 15 open houses along the project route to engage stakeholders.
If “market conditions rebound and the market needs an additional transportation solution, PGAP will host a new open season and will communicate to the Commission the project’s viability and open season results,” Mahmoud said. PGAP then would work with FERC to reestablish a NEPA review.
Tellurian also has proposed building three other gas pipelines that eventually could provide export supply. The $1.4 billion, 2 Bcf/d Haynesville Global Access Pipeline would move gas from the northwestern part of the Haynesville Shale in Louisiana to Gillis; it was deferred earlier this year. In addition, little mention has been made of late about the 2 Bcf/d Delhi Connector Pipeline to move gas from Gillis to the Driftwood terminal site or the 4 Bcf/d Driftwood Pipeline.
On Monday, Tellurian announced the departure of Gentle, who joined the company in 2016 after working for Cheniere Energy Inc. Former Sempra LNG CEO Octávio Simões, who joined Tellurian as an adviser last year, was named the new chief. Gentle joined Tellurian after co-founder Charif Souki was ousted from Cheniere, which he also co-founded.
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