Tellurian Proposes Fourth Natural Gas Pipeline to Serve US Gulf Coast Markets

SEATTLE (Oil Monster): Tellurian launched a fourth natural gas pipeline project Monday as the Driftwood LNG export terminal developer ups its bet on US Gulf Coast demand for the fuel heading into next decade.

The 180-mile Delhi Connector Pipeline would connect the Perryville Hub in Richland Parish, Louisiana, to Gillis, Louisiana, with at least 2 Bcf/d of gas as early as 2023. The proposal adds to Tellurian's plans for the Permian Global Access Pipeline, Haynesville Global Access Pipeline and the already Federal Energy Regulatory Commission-approved Driftwood Pipeline.

Together, the almost $9 billion network of pipelines would criss-cross Texas and Louisiana and feed gas to its export terminal and to other shippers and end-users across the region. Unlike most of the other second wave terminal developers that are focused mainly on their liquefaction facilities, Tellurian has been aggressively pursuing midstream infrastructure and upstream shale drilling acreage in an effort to have greater control over their delivery and input costs.

Tellurian said it was conducting a binding open season for Delhi Connector, as well as one for Haynesville Global Access, both of which run through June 21. The Haynesville pipeline is proposed to interconnect existing pipeline and production facilities in DeSoto Parish to existing and proposed infrastructure located near Gillis in Calcasieu Parish.

In February 2018, Tellurian launched a non-binding open season for the Haynesville pipeline. A binding open season was launched recently for Permian Global Access Pipeline and runs through May 24.

Tellurian continues to finalize equity partnerships to finance Driftwood LNG, which like the Driftwood feedgas pipeline, has received FERC permit approval.

At full development, about half of the liquefaction terminal's 27.6 million mt/year capacity is expected to be used by equity investment partners. The rest would be held by Tellurian to market on its own.

The equity arrangements would require the partners to make a minimum upfront $500 million equity investment in the holding company that controls the Driftwood terminal and the pipelines it plans to build, in exchange for the right to lift 1 million mt/year of LNG from the export terminal for the life of the facility. France's Total signed a heads of agreement for the minimum in early April based on those terms.

Courtesy: www.spglobal.com