December 2022, Vol. 249, No. 12
Features
Looking Back at the Top 10 Midstream Stories of 2022
By Pipeline & Gas Journal Staff
(P&GJ) — In this year-ending issue of P&GJ, the staff, along with a little help from its readers, has taken a look back at the frequently volatile year that was 2022.
As was the case during the previous 12 months, the year brought its share of anxiety as we in the energy industry – midstream in particular – worked to adjust to the global demand for natural gas, following Russia’s invasion of Ukraine.
Our list of Top 10 stories was compiled from our website readership numbers throughout the year, along with staff suggestions.
- ET Eyes Permian Pipeline, Starts Gulf Run Construction (February)
Starting the year off with a bang, Energy Transfer joined at least two other companies looking to build the next pipeline to transport growing natural gas production from the Permian Basin to export hubs on the Gulf Coast.
“Given the proposed route and our ability to utilize existing assets, we believe we could complete construction of (the Permian) project in two years or less once we have reached FID (final investment decision),” Energy Transfer Co-Chief Executive Thomas Long told analysts on an earnings call.
With production growing fast in the Permian and demand rising from new LNG export plants on the Gulf Coast, some other companies are also looking to add new gas pipelines in the region, including units of Kinder Morgan and MPLX.
Energy Transfer also said it started building the Gulf Run pipeline in Louisiana to move gas from the Haynesville Shale in Texas, Arkansas and Louisiana to the Gulf Coast.
The Gulf Run is backed by a 20-year agreement with QatarEnergy (70%)/Exxon Mobil Corp’s XOM.N (30%) $10 billion Golden Pass LNG export plant under construction in Texas.
Energy Transfer’s Long said the company expects to complete Gulf Run by the end of 2022.
Update: The Gulf Run Pipeline is adding about 1.25 Bcf/d of capacity while requiring about 260 miles (418-km) of new pipeline.
- Whistler’s Lateral Pipeline Expansion Began to Flow (January)
Whistler Pipeline started its 2022 by announcing the expansion of it Midland Basin footprint with a new 36-inch lateral extending northwest into Martin County.
The Martin County lateral will lengthen the existing 36-inch, 35-mile Midland lateral, which connects to multiple processing sites in the county. The lateral is scheduled to be in service in the fourth quarter of 2022.
The Whistler pipeline is a 450-mile, 42-inch intrastate pipeline that transports natural gas from the Waha Header in the Permian Basin to Agua Dulce, Texas, providing direct access to South Texas and export markets. An 85-mile 36-inch lateral provides connectivity to the Midland Basin.
Whistler is owned by a consortium including MPLX LP, WhiteWater, and a joint venture between Stonepeak and West Texas Gas.
- Baltic Pipeline Began Flowing Gas (September)
The $2 billion Baltic Pipe began flowing Norwegian natural gas to Poland on Sept. 27, a government official said, marking a key step in Europe’s drive toward energy independence from Russia.
Poland’s deputy infrastructure minister, Marek Grobarczyk, wrote on Twitter that work is continuing on the 560-mile (900-km) Baltic Pipe’s compressor stations. He initially wrote that the project will be completed on Sept. 29, then he updated the date in a posting later the same day.
“The good news is that Baltic Pipe will be ready in the near future. But the better news is that [it will be] even two days faster than I presented it this morning,” Grobarczyk wrote.
“Work is underway to prepare, above all, the compressor stations, which are to deliver nearly 10 billion cubic meters [353 billion cubic feet of] gas,” he wrote. “Together with LNG [liquefied natural gas] in Świnoujście and own extraction, it gives 100% energy security” for Poland.
The Świnoujście LNG terminal, operated by a unit of Gaz-System, opened in late 2015 with a regasification capacity of 177 Bcf/a (5 billion cubic meters per annum [Bcm/a]). It will have a capacity of 247 Bcf/a (7.5 Bcm/a) after completion of an ongoing expansion next year, enough to satisfy roughly half of Poland’s natural gas demand.
The Baltic Pipe is expected to flow at a rate of about 71 to 106 Bcf/a (2 to 3 Bcm/a) during its startup phase before increasing to 10 Bcm/d, Grobarczyk said.
Poland’s Gaz-System and Denmark’s Energinet, partners in the Baltic Pipe project, announced on July 22 that the last welds of the offshore pipeline were made to connect the Danish transmission network in Faxe to the Polish transmission system in Pogorzelica.
The tie-in of offshore pipeline with onshore pipelines in both countries followed a series of preparatory steps, including cleaning the offshore pipeline with cleaning pigs, performing a water pressure test, dewatering the pipeline with specialized pigs and drying.
On the Danish side, Energinet welded an approximately 390-foot (120-meter) section connecting the onshore pipeline to the offshore pipeline in a previously prepared open trench. On the Polish side, a similar operation by Gaz-System involved the welding of a 295-foot (90-meter) connector.
- Nord Stream: Authorities Won’t Allow Us to Inspect Damage (September)
The operators of two Baltic Sea gas pipelines that linked Russia and Germany until they both sprang major leaks last week said they were unable to inspect the damaged sections because of restrictions imposed by Danish and Swedish authorities.
Nord Stream 2 AG, Switzerland-based operator of that gas pipeline, said it will examine the condition of the leaking pipelines once a police investigation of the “crime scene” is completed and a cordon is lifted.
“According to the Swedish authorities, a ban on shipping, anchoring, diving, using of underwater vehicles, geophysical mapping, etc. has been introduced to conduct a state investigation around the damage sites in the Baltic Sea,” Nord Stream said in a press release.
Switzerland-based Nord Stream 2 said in emailed comments it was “cooperating with all relevant authorities.”
“Copenhagen police are handling the investigation of the crime scene at the Nord Stream 2 leak in the Danish EEZ (exclusive economic zone),” it said. “The Swedish coast guard has cordoned off the area around the leak in the Swedish EEZ.”
Update: A month later, Nord Stream AG sent a chartered ship to waters off the coast of Sweden to survey the damage for the first time and concluded that four Nord Stream leaks were caused by explosions.
Their investigators were unable to determine who might have been responsible.
- Enbridge Expanding Pipeline to Texas LNG Brownsville (January)
Texas LNG Brownsville and Enbridge signed a pipeline transportation precedent agreement for the expansion of the Valley Crossing Pipeline (VCP) to deliver about 720 MMcm a day of natural gas to Texas LNG’s export facility for a term of at least 20 years.
Texas LNG is developing a four million tons per annum LNG export terminal in the Port of Brownsville, South Texas.
VCP consists of a 160-mile, 42- and 48-inch pipeline originating at Agua Dulce, a major Texas gas hub, and extending to the Port of Brownsville. A 10-mile lateral will be built to extend the pipeline to Texas LNG’s facility, along with the addition of compression facilities on the existing pipeline.
VCP’s pipeline header at Agua Dulce, a growing gas pricing and transportation hub in south Texas, interconnects with ten major gas pipeline systems, providing access to abundant and competitively priced gas from the Permian and other major gas basins with a total receipt capacity of more than seven billion cubic feet per day. The compression facilities at Agua Dulce will use electric motors that can be powered by renewable energy.
“Enbridge has been a tremendous supporter of Texas LNG from the project’s inception. We are pleased that we can leverage Enbridge’s leading natural gas pipeline expertise to safely transport responsible natural gas to our ‘green by design’ LNG facility,” said Vivek Chandra, Founder and CEO of Texas LNG.
The agreement is subject to routine conditions precedent and other industry standard provisions.
Texas LNG expects to achieve the final investment decision in 2022 and commercial operations in 2026.
- Central Africa to Construct Over 4,000 Miles of Pipeline (September)
Several Central African nations agreed to create a regional oil and gas pipeline network and infrastructure hub that backers say will reduce dependence on imports of refined products.
The project, at this point, would include three multinational pipeline systems of about 4,000 miles (6,500 km), LNG terminals, storage facilities and at least three refineries and gas-fired power plants. A spokesman said the plan is to link 11 countries, most of which have little if any refining capacity, by 2030. Among the countries are Democratic Republic of Congo, Angola, Equatorial Guinea, Cameroon, Chad, Gabon and Congo Republic.
Gabriel Mbaga Obiang Lima, minister of Mines and Hydrocarbons of OPEC member Equatorial Guinea, said before the signing ceremony in Cameroon that the project was crucial to tackle energy poverty in the region.
He said the project was inspired by West Africa’s gas pipeline linking Nigeria, Benin, Togo and Ghana, and the European model where Rotterdam serves as a refining and distributing hub for several countries.
“It will not be cheap, or easy, but if it is done as a collaboration, it will work,” he told Reuters, adding that the network will help get rid of trucks crisscrossing countries and boost the regional oil and gas market taking products where needed.
The memorandum of understanding for the project signed by the African Petroleum Producers’ Organization (APPO), one of the backers, and the Central Africa Business Energy Forum, will pave the way for feasibility studies.
- Sempra Wins Extension to Build Pipelines in Texas, Louisiana (April)
The Federal Energy Regulatory Commission (FERC) granted Sempra Energy an extension to build two pipelines in Texas and Louisiana that are designed to connect to a Texas LNG plant.
Sempra Energy was granted an extension until March 31, 2023, for the two pipelines that will connect to its Port Arthur LNG plant. NextDecade Corp. also sought an extension, to November 2028, for its Rio Grande LNG project in Brownsville, Texas.
Several LNG developers announced new deals during 2022 that could boost plans for proposed plants. Energy Transfer signed a 2.7 mtpa deal with ENN, while Mexico Pacific agreed to a 2-mpta deal Chinese utility Guangzhou Development.
Update: The upshot from the Sempra extension is that there appears to be some loosening by FERC of time restrictions for proposed pipelines running to LNG facilities. If that is the case, the big winners will be the companies operating within Texas and Louisiana.
- US Court Vacates Federal Permit for Mountain Valley Pipeline (January)
In a busy start to the year, the 4th Circuit of the U.S. Court of Appeals threw out federal approvals for Equitrans Midstream’s under construction Mountain Valley natural gas pipeline under construction from West Virginia to Virginia.
Specifically, the court vacated the record of decisions of the U.S. Forest Service and the Bureau of Land Management allowing the pipe to cross about 3.5-miles (5.6-km) through the Jefferson National Forest and sent the case back to the agencies.
In an email, Equitrans said “We are thoroughly reviewing the Court’s decision regarding (Mountain Valley’s) crossing permit for the Jefferson National Forest and will be expeditiously evaluating the project’s next steps and timing considerations.”
In the past, Equitrans has said it expected the project to enter service during the summer of 2022.
Analysts at ClearView Energy Partners LLC said the loss of the permit likely means “completion of the pipeline this calendar year now looks unlikely.”
When Mountain Valley construction started in February 2018, Equitrans estimated the 303-mile (488-km), 2.0-Bcfd project would cost about $3.5 billion and enter service by late 2018.
At the time, the project was targeting a summer 2022 in-service date and lacked only 20 miles of pipe left to weld.
Update: In August, FERC approved the Mountain Valley Pipeline’s request for four more years to build the natural gas line from West Virginia to Virginia.
However, in late-October, a federal circuit court said West Virginia regulators still have not adequately explained how approvals for construction on the Mountain Valley Pipeline have been changed to avoid future water pollution. This could prompt further legal challenges.
- TC Energy Hires Contractor to Lay 445-Miles of Offshore Gas Pipeline (October)
TC Energy hired Allseas, Swiss-based contractor, to install the 445-mile (715-km) offshore segment of the Southeast Gateway Pipeline in the Gulf of Mexico.
The $4.5 billion Southeast Gateway Pipeline, which received approval in August, is the first significant gas infrastructure project to result from a strategic partnership between TC Energy and Mexico’s state-owned utility Comisión Federal de Electricidad (CFE), Upstream Online reported.
“Together, TC Energy and the CFE will develop critical energy infrastructure to serve the growing central and southeast regions of Mexico,” François Poirier, president and CEO of TC Energy, said. “The Southeast Gateway Pipeline will be TC Energy’s second marine natural gas pipeline in Mexico, connecting to the coastal regions of Veracruz and Tabasco, and is another prime example of our ability to originate world-class projects that offer incremental growth to our long-term outlook.”
The 36-inch natural gas pipeline will follow the coast southward, running from Tuxpan through the Gulf of Mexico, essentially connecting the ports of Coatzacoalcos and Dos Bocas. An estimated 37 million cubic meters of natural gas per day will be transported by the pipeline.
TC Energy said sanctioning of the pipeline would expand its secured capital program to $33 billion and could add to its 2021-2026 adjusted EBITDA growth outlook.
The pipe for the project will be supplied by Germany-based EUROPIPE, which received the order from TC Energy back in August, Offshore Energy reported. The scope of work includes providing 227 miles (365 km) of pipe equipped with anti-corrosion coating.
In addition to the installation of the 425-mile (685-km) Sur de Texas-Tuxpan pipeline in 2017, which Allseas also installed to enable the delivery of gas produced in Texas to Mexico, the company stated that the Southeast Gateway Pipeline is its second pipeline in Mexico.
The Southeast Gateway Pipeline is expected to start being laid at the end of 2023 and should be operational by the middle of 2025.
- Nigeria Approves Next Step for Morocco-to-Europe Gas Pipeline (June)
Africa to Europe gas pipeline took another step toward construction after Nigeria told its state oil firm, NNPC, it could sign a memorandum of understanding with West African regional body Economic Community of West African States (ECOWAS).
Nigeria and Morocco signed a joint venture in 2016 to construct the pipeline, which is designed to transport gas, from Morocco to Spain and Europe, to 15 West African countries.
“We are still at the front-end engineering design,” Junior Oil Minister Timipre Sylva said at a cabinet meeting in Abuja, adding that the cost and the funding of the pipeline had not yet been determined.
Nigeria and Morocco said in 2021that the pipeline will be 3,517 miles (5,660 km), and that construction will be in phases covering 25 years.
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