Enbridge to Expand Natural Gas Pipeline for Transport to Texas LNG Brownsville
Texas LNG Brownsville, a subsidiary of Glenfarne Group, and Enbridge Inc., an energy infrastructure company, have executed a pipeline transportation precedent agreement for the expansion of the Valley Crossing Pipeline (VCP) to deliver about 720 million cubic feet per 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 diameter 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 which can be powered by plentiful Texas renewable energy, thus reducing CO2 emissions.
“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's other strengths include efficient modular construction design, transparent competitive pricing structure, and lower-carbon "green" LNG resulting from usage of more efficient electrical drive motor rather than gas-fired engines to drive the liquefaction compressors. The realistically sized four MTPA capacity of the facility fills an essential niche from LNG customers seeking smaller contracted volumes to diversify their gas supply portfolio. Texas LNG expects to achieve the final investment decision in 2022 and commercial operations in 2026.
White & Case acted as legal advisor for Texas LNG, and Vinson & Elkins represented Enbridge.
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