NGPL to expand with Corpus Christi LNG deal

OREANDA-NEWS. September 14, 2015. Natural Gas Pipeline of America (NGPL) will sell about 372mn cf/d (10.5mn m?/d) of gas for 20 years to Cheniere Energy's Corpus Christi LNG export project in south Texas, allowing NGPL to build the first phase of its Gulf Coast Market Expansion, NGPL told Argus today.

The 9,200-mile (14,806km) NGPL system in February 2014 held a non-binding open season to gauge interest in up to 742mn cf/d of southbound transportation capacity from multiple receipt points, including its connection with the Rockies Express pipeline in Moultrie, Illinois. The project is designed to provide new markets in the midcontinent and Gulf coast for Marcellus and Utica shale gas. Rex last month increased east-to-west capacity to 1.8 Bcf/d from 600mn cf/d from eastern Ohio to Moultrie.

NGPL is negotiating with other customers interested in capacity in the expansion, but it declined to provide details.

The \\$212mn project to serve the Corpus Christi terminal will include the reversal of four compressor stations in Victoria, Wharton, Montgomery and Angelina counties, Texas, and a new compressor station in Cass county, Texas. Pending regulatory approvals, the project is scheduled to come on line in July 2019.

"We are pleased to move forward with this project as gas production increases in the Utica and Marcellus shale and markets continue to grow along the Gulf Coast," said NGPL president David Devine.

NGPL will link with a 23-mile (37km), 48-inch (122cm) diameter pipeline that Cheniere will build to receive gas from the regional pipeline grid.

The pipeline, which will have a peak capacity of 2.25bn ft?/d, will run from the terminal to a point near the city of Sinton, Texas. In addition to NGPL, it would connect with Texas Eastern Transmission, Kinder Morgan Tejas, Transco and Tennessee Gas Pipeline.

Corpus Christi is near the prolific Eagle Ford shale formation in Texas.

Cheniere in May made an \\$11.5bn final investment decision (FID) to build the first two of up to five liquefaction trains at Corpus Christi, which will be the first greenfield LNG export terminal in the contiguous US. Each train would have peak capacity of 5mn t/yr, equivalent to 700mn cf/d of gas, for total capacity of up 25mn t/yr. Exports could start as early as 2018.

Corpus Christi signed binding 20-year deals for a combined 7.65mn t/yr of capacity from its first two trains before oil prices plummeted. Cheniere wants to sell 2.85mn t/yr of capacity at \\$3.50/mmBtu to finance the third train at Corpus Christi, which would give it 1.7mn t/yr of its own supply to market. It has said it expects to make an FID in the second half of 2015 and bring the train on line in 2021.

Cheniere is building five liquefaction trains at its brownfield Sabine Pass LNG terminal in Louisiana, with the first test cargo scheduled to be sent out late this year. The company will procure gas for its LNG customers and will be one of the largest buyers of US gas, with demand of about 6 Bcf/d for Sabine Pass and Corpus Christi.