Permian Global Access Pipeline

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Permian Global Access Pipeline, also called the PGAP Project, is a proposed natural gas pipeline in Texas and Louisiana.[1] The project was formally shelved by Tellurian Inc. in December 2020.[2]

Location

The pipeline will run from Waha Hub, Pecos County, Texas to Gillis, Louisiana, USA.[3][4]

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Project Details

  • Owner: Tellurian Inc.
  • Proposed capacity: 2,000 million cubic feet per day
  • Length: 1,005.8 kilometers / 625 miles
  • Status: Shelved
  • Start Year: 2023
  • Cost: US$4.2 billion[2]

Background

The US$3.7 billion pipeline will have the capacity to transport 2 billion cubic feet of gas a day. It is expected to begin operation by 2022. It will be part of Tellurian's planned US$7 billion pipeline network in Texas and Louisiana, designed to support Tellurian's Driftwood LNG Terminal, a proposed natural gas export facility near Lake Charles, Louisiana. It will run 625 miles, taking natural gas from Pecos County, Texas to Jefferson Davis Parish in Louisiana.[5]

In April of 2019, Tellurian announced that its subsidiary Permian Global Access Pipeline LLC was holding an open season to secure prospective shippers for its proposed PGAP project. The open season ended May 24, 2019. As of February 2020, Tellurian lists the project status as "submitted pre-filing review with FERC,"[6] and their expected start of operations as 2023.

During an investor presentation in June 2020, Tellurian's CEO Meg Gentle disclosed that the company was reconsidering the future of the pipeline as the company's financial difficulties are forcing it to take cost-cutting measures. The possible axing of the project is also linked to reduced drilling in the Permian Basin. The Permian Global Access Pipeline had been proposed in 2017 to feed Tellurian's proposed Driftwood LNG Terminal with cheap associated gas. Instead, Tellurian may opt to prioritise its Haynesville Global Access Pipeline to supply the proposed Driftwood terminal which is experiencing delays as a result too of Tellurian's financial problems.[7]

On June 16, 2020 S&P Platts Global reported CEO Gentle saying that Tellurian no longer needed to build the pipeline due to reduced drilling in the Permian Basin.[8] Further speculation that Tellurian may axe the pipeline project emerged in July 2020 when the company disclosed cost-cutting intentions to enable the Driftwood LNG Terminal to proceed, with analysts at Scotiabank surmising that this could mean the end for the Permian Global Access Pipeline. Tellurian, however, did not provide details on the cost cuts.[9]

In August 2020, a Tellurian investor presentation, posted on the company's website and filed with the U.S. Securities and Exchange Commission, disclosed that the Permian Global Access Pipeline project was being deferred.[10]

In December 2020, Tellurian disclosed that it had withdrawn its application with the U.S. Federal Energy Regulatory Commission to build the pipeline, citing that "current market conditions do not support the economic thresholds to pursue the (Permian pipe) further at this time." The company also said that it could resume the project in the future if the market recovers.[2]

Articles and resources

References

  1. Planned Pipelines, Pipeline News, accessed October 2018
  2. 2.0 2.1 2.2 Tellurian withdraws U.S. application to build Permian natgas pipeline, Reuters, Dec. 1, 2020
  3. Permian Global Access Pipeline LLC. "PGAP ROUTE". PGAP.com. Retrieved 29 February 2020.
  4. National Energy and Petrochemical Map , FracTracker, February 28, 2020
  5. Ryan Maye Handy, Tellurian seeks financing for new Permian gas pipeline, Chron.com, March 21, 2018
  6. Tellurian (6 January 2020). "Corporate presentation: January 2020" (PDF). CloudFront.net. Retrieved 29 February 2020.
  7. Ron Nissimov, "Tellurian Delays Driftwood FID, May Drop Permian Pipeline Plan" Natural Gas Intel, Jun. 17, 2020
  8. "Driftwood LNG target construction start delayed until 2021: Tellurian CEO", S&P Global Platts, Jun. 16, 2020
  9. "Tellurian evaluates changes to Driftwood LNG project, plans shares issue", Reuters, Jul. 22, 2020
  10. Harry Weber, "Tellurian drops three gas pipelines from first phase of US LNG export project", S&P Global Platts, Aug. 12, 2020

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