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Released March 27, 2024 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Canadian pipeline company Enbridge (NYSE:ENB) (Calgary) said it was looking to tap into the U.S. Gulf Coast market by developing and operating natural gas pipelines tied to the Permian Basin.
Capitalizing on the boom in the liquefied natural gas (LNG) sector, Enbridge said it has an agreement with WhiteWater/I Squared Capital to develop a joint venture focused on midstream opportunities that could connect the Permian to LNG export hubs.
Enbridge would acquire a full stake in some 590 miles of natural gas pipelines, including the Whistler pipeline, which is already carrying Permian gas.
It would also secure a 100% interest in the proposed Rio Bravo pipeline, a 137-mile project that could bring gas to NextDecade's (NASDAQ:NEXT) (Houston, Texas) LNG project slated for Brownsville, Texas. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipelines Project Database can click here for the Rio Bravo Pipeline project reports.
NextDecade is building its Rio Grande LNG facility near the Brownsville shipping channel in far south Texas. Its lease includes 15,000 feet of frontage on the channel and it's permitted for as much as 27 million tons of LNG exports per year (MTPA).
The facility could have as many as five liquefaction and purification units, called trains. GMI Oil & Gas Production Project Database subscribers can click here for the related project reports.
Enbridge would also secure a 70% interest in a proposed pipeline that could carry as much as 1.7 billion cubic feet of natural gas per day (Bcf/d) to Cheniere Energy Incorporated's (NYSE:LNG) (Houston, Texas) LNG export facility in Corpus Christi, among the busiest in the nation.
An additional 50% stake would cover the Waha storage facility, which boasts a capacity of around 2 Bcf of natural gas.
"Having access to new Permian natural gas infrastructure enhances and increases the visibility of our medium-term growth outlook, while being accretive to our balance sheet," said Pat Murray, the chief financial officer at Enbridge.
The Permian is the largest inland shale oil producer in the country and the second-largest gas producer after the Appalachia Basin. The U.S. Energy Information Administration (EIA), the statistical arm of the Department of Energy, expects Permian production to average 25.1 Bcf/d by April.
That would mark an increase of about a half percent from March levels, should the forecast prove accurate.
The pace of production growth is a growing concern in the shale patch. Tamas Varga, an analyst at London oil broker PVM, said energy companies have taken a leaner approach to production since the end of the COVID-19 pandemic, adding consolidation in the shale patch could crimp supplies even further.
"This consolidation, on one hand, implies that large producers see long-term potential in the shale sector, possibly due to stable oil price estimates and resilient demand but at the same time the plethora of acquisitions will ensure that capex discipline will act as a brake on production growth as shareholders' return must also be taken into consideration," he wrote in PVM's daily newsletter.
But any slowdown would come from a decidedly high level and few forecasts point to an exponential drop in production. The EIA expects dry natural gas production to average 103 Bcf/d this year, down slightly from last year, though that should increase to 104 Bcf/d in 2025.
LNG volumes, meanwhile, are on the rise even after the White House paused new permits to examine the environmental footprint of the industry. The United States already leapfrogged Australia and Qatar to become the world's largest exporter of LNG.
The EIA expects LNG exports to increase from an expected average of 12 Bcf/d to 14 Bcf/d by 2025.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Capitalizing on the boom in the liquefied natural gas (LNG) sector, Enbridge said it has an agreement with WhiteWater/I Squared Capital to develop a joint venture focused on midstream opportunities that could connect the Permian to LNG export hubs.
Enbridge would acquire a full stake in some 590 miles of natural gas pipelines, including the Whistler pipeline, which is already carrying Permian gas.
It would also secure a 100% interest in the proposed Rio Bravo pipeline, a 137-mile project that could bring gas to NextDecade's (NASDAQ:NEXT) (Houston, Texas) LNG project slated for Brownsville, Texas. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipelines Project Database can click here for the Rio Bravo Pipeline project reports.
NextDecade is building its Rio Grande LNG facility near the Brownsville shipping channel in far south Texas. Its lease includes 15,000 feet of frontage on the channel and it's permitted for as much as 27 million tons of LNG exports per year (MTPA).
The facility could have as many as five liquefaction and purification units, called trains. GMI Oil & Gas Production Project Database subscribers can click here for the related project reports.
Enbridge would also secure a 70% interest in a proposed pipeline that could carry as much as 1.7 billion cubic feet of natural gas per day (Bcf/d) to Cheniere Energy Incorporated's (NYSE:LNG) (Houston, Texas) LNG export facility in Corpus Christi, among the busiest in the nation.
An additional 50% stake would cover the Waha storage facility, which boasts a capacity of around 2 Bcf of natural gas.
"Having access to new Permian natural gas infrastructure enhances and increases the visibility of our medium-term growth outlook, while being accretive to our balance sheet," said Pat Murray, the chief financial officer at Enbridge.
The Permian is the largest inland shale oil producer in the country and the second-largest gas producer after the Appalachia Basin. The U.S. Energy Information Administration (EIA), the statistical arm of the Department of Energy, expects Permian production to average 25.1 Bcf/d by April.
That would mark an increase of about a half percent from March levels, should the forecast prove accurate.
The pace of production growth is a growing concern in the shale patch. Tamas Varga, an analyst at London oil broker PVM, said energy companies have taken a leaner approach to production since the end of the COVID-19 pandemic, adding consolidation in the shale patch could crimp supplies even further.
"This consolidation, on one hand, implies that large producers see long-term potential in the shale sector, possibly due to stable oil price estimates and resilient demand but at the same time the plethora of acquisitions will ensure that capex discipline will act as a brake on production growth as shareholders' return must also be taken into consideration," he wrote in PVM's daily newsletter.
But any slowdown would come from a decidedly high level and few forecasts point to an exponential drop in production. The EIA expects dry natural gas production to average 103 Bcf/d this year, down slightly from last year, though that should increase to 104 Bcf/d in 2025.
LNG volumes, meanwhile, are on the rise even after the White House paused new permits to examine the environmental footprint of the industry. The United States already leapfrogged Australia and Qatar to become the world's largest exporter of LNG.
The EIA expects LNG exports to increase from an expected average of 12 Bcf/d to 14 Bcf/d by 2025.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
