US LNG developer Tellurian launches open season for Permian Global Access Pipeline

Tuesday, 09 April 2019
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Tellurian Inc. developer of the Driftwood LNG project in Louisiana backed by companies such as French energy major Total, has launched an open season for its Permian Global Access Pipeline to secure prospective customers.

The Permian Global Access project is a proposed 42-inch diameter inter-state natural gas pipeline originating at the Waha Hub in Pecos County in Texas and terminating at Gillis in Louisiana, north of Lake Charles where the liquefaction plant will be constructed.

The final environmental impact statement was issued by the US Federal Energy Regulatory Commission in January 2019 to develop the Driftwood liquefaction plant to produce around 27.6 million tonnes per annum of LNG.

The pipeline will connect the prolific Permian Basin in Texas to the rapidly growing natural gas market in southwest Louisiana.

“It will cost approximately $3.7 billion to construct and will have the capacity to transport at least two billion cubic feet of natural gas a day,” said Tellurian.

“Construction could begin as early as 2021 and the pipeline is targeted to be in service as early as 2023,” added the company.

Tellurian is also developing a second pipeline venture called the Haynesville Global Access Pipeline at around the same cost.

In addition to spending $7.4Bln on the two pipelines, Tellurian is developing the liquefaction plant near Lake Charles with total investments of around $15.2Bln and the provision of about 15,000 jobs.

“Permian producers have recently paid $9.00 per million British thermal units to move their natural gas away from the wellhead, reflecting the acute need for infrastructure development in the Basin,” said Tellurian Chief Executive and President Meg Gentle.

“By contrast, Southwest Louisiana is a market expected to grow 300 percent in the next five years,” added Gentle.

“The Permian Global Access Pipeline is critical infrastructure that will interconnect stranded Permian gas production with growing markets, reduce flaring and provide a valuable cleaner fuel to reduce urban pollution and carbon globally,” stated the CEO.

The open season was scheduled to begin at noon Central time on April 8 and runs to Friday, May 24.

Tellurian said it would encourage interested parties to contact Joey Mahmoud, President of the Permian Global Access Pipeline project, at the pipeline company website.

The pipeline open season follows recent advances in the LNG project with Total signing two accords to invest more in the development company and to take its supply requirements from the venture to 2.5 MTPA of LNG.

The sales agreement will be for the purchase of free-on-board (FOB) whereby Total supplies the shipping and for a minimum term of 15 years and based on the Platts Japan Korea Marker (JKM) price.

Total’s equity agreement gives the French company an additional 20 million shares of Tellurian common stock for an amount of $200 million, adding to its previous investment.

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