The 4 million metric tons/year Texas liquefied natural gas (LNG) project under development in South Texas announced a deal with Enbridge Inc. on Tuesday to expand the Valley Crossing Pipeline to feed the proposed export terminal.
Texas LNG, a subsidiary of energy infrastructure development firm Glenfarne Group LLC, said it signed a precedent agreement to expand Valley Crossing to bring 720 MMcf/d to the terminal over 20 years.
The LNG export project is one of about nine targeting a final investment decision (FID) in North America this year. It has not yet signed any binding long-term agreements to sell LNG, which are generally required to secure financing.
When asked about the progress of any deals on Tuesday, a project spokesperson referred NGI to prepared remarks by Glenfarne CEO Brendan Duval. The CEO in his remarks stressed the precedent agreement is one of “several important milestones” the project would achieve on its path to sanctioning.
“Our agreement with Enbridge helps us accomplish our strategy of delivering LNG to our own gas-consuming projects around the world and to third party customers,” Duval said in announcing the deal.
The 2.6 Bcf/d Valley Crossing came online in 2018 to move U.S. gas from the Agua Dulce hub to a cross-border connection in the Gulf of Mexico with the Sur de Texas-Tuxpan pipeline. Enbridge would construct a 10-mile lateral to extend the pipeline to Texas LNG’s proposed facility, along with the addition of compression facilities on the existing pipeline.
Enbridge unveiled the $400 million expansion project late last year, indicating that progress on the expansion would depend on Texas LNG’s timeline.
Development started on Texas LNG in 2013. The project was approved by the Federal Energy Regulatory Commission in 2019 and received approval to globally export gas in 2020.
Nonbinding term sheets were signed in 2017 with potential buyers in Southeast Asia and China. Texas LNG officials said at the time that it expected to reach FID in 2018, but sanctioning was delayed. The project would be built on the tip of South Texas in Cameron County. Glenfarne said Tuesday the small export project fulfills an “essential niche” for LNG customers “seeking smaller contracted volumes to diversify their gas supply portfolio. The company is also developing the Magnolia LNG project in Lake Charles, LA, after taking it over in 2020.
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