LNG

Williams Companies, the North American pipeline natural gas and storage and gathering operator, plans to proceed with the Louisiana Energy Gateway (LEG) natural gas pipeline even in the face of an ongoing dispute.

The Tulsa, Oklahoma-based company has notified the US Federal Energy Regulatory Commission that it intends to proceed as early as July 25 with construction of the pipeline to carry 1.8 billion cubic feet per day

The Louisiana Energy Gateway will transport Haynesville shale gas to the US Gulf Coast and is now scheduled to come on stream in the second half of 2025, though commissioning was originally planned for late 2024.

Williams currently has 33,000 miles of pipelines to move about one third of the nation’s natural gas.

Moving forward

The company has told FERC it was moving forward with work despite pending rulings, saying it recently “won victories in certain right-of-way litigation” with subsidiaries of Energy Transfer LP in Louisiana state courts involving proposed pipeline crossings for the LEG system.

The company said those victories, along with securing the necessary easements and FERC permits, would allow it to proceed with the work.

“Without the crossing litigation with Energy Transfer, construction of the system would already be well underway,” Williams stated.

The Energy Transfer legal counsel has countered by claiming that Williams was circumventing (FERC’s) Natural Gas Act authority to review jurisdiction of the Louisiana Energy Gateway project.

Energy Transfer, based in Dallas, Texas, has also pointed out “inconsistencies” between Williams’ testimony in a Louisiana state court that LEG had already begun construction.

The attorney’s letter to FERC ended with a suggestion that the Commission should clarify the rules soon on whether or not the Williams project was subject to FERC jurisdiction.

Appeals court

The Louisiana Second District Court of Appeals has already overturned a ruling that prevented DT Midstream Inc. from building a natural gas pipeline running beneath Energy Transfer’s Tiger pipeline system.

Williams had filed a brief on behalf of DT Midstream in that case.

Williams confirmed in its fourth-quarter earnings in February 2024 that it had received certificates for Transco's Commonwealth Energy Connectors, the Southside Reliability Enhancement and the Southeast Energy Connector as well as the Texas-to-Louisiana Energy Pathway.

The company has operations in four main business segments, Transmission & Gulf of Mexico, Northeast G&P, West operations and Gas & Natural Gas Liquids Marketing Services.

Williams has additionally acquired a portfolio of 115 Bcf of natural gas storage, positioning the company as the largest storage owner on the Gulf Coast as storage needs rise.

The South Koreans have swooped to become the fourth customer signed up in foru weeks for Energy Transfer LP’s liquefied natural gas volumes from the Lake Charles LNG terminal on the US Gulf Coast being transformed into a liquefaction and export plant.

Energy Transfer LP, the owner of assets in the Permian Basin and Haynesville Shale as well as the Cushing crude oil delivery system, has signed two LNG sale and purchase agreements with ENN Group for its almost forgotten Lake Charles LNG export project in Louisiana.

Under the two SPAs, Energy Transfer is expected to supply 1.8 million tonnes of LNG to ENN's natural gas subsidiary and 900,000 tonnes of LNG to the ENN Energy unit per annum on a free-on-board (FOB) basis.

Energy Transfer said the purchase price was indexed to the Henry Hub benchmark plus a fixed liquefaction charge.

Both SPAs are for a term of 20 years and first deliveries are expected to commence as early as 2026.

China’s ENN has an annual LNG distribution capacity of over 10 billion cubic metres of natural gas and runs the first large-scale private LNG terminal in China, the Zhoushan LNG facility in eastern Zheijang province south of Shanghai.

The SPAs will become fully effective upon the satisfaction of the conditions precedent by Energy Transfer’s plan and final investment decision to transform the existing Lake Charles LNG import terminal into an export plant.

Almost forgotten

The Lake Charles LNG import terminal once had BG Group of the UK as a main customer. Shell then become a terminal partner before later withdrawing from the export plant joint venture.

The Federal Energy Regulatory Commission has issued permits for the Lake Charles transformation and to produce 16.5 million tonnes per annum of LNG.

Energy Transfer had acquired the Lake Charles terminal in mid-2011 with the takeover of Southern Union Co. for $7.9 billion.

“The signing of these long-term SPAs will further enrich ENN’s LNG resources, expand resource supply channels, and improve ENN’s natural gas supply capacity to meet the rapidly growing natural gas demand in the domestic market,” said Zheng Hongtao, President of ENN’s natural gas unit and Vice Chairman of the Board.

Tom Mason, President of Energy Transfer LNG, said the Dallas, Texas-based company was pleased to have ENN Energy onboard.

“The execution of these two SPAs represents a significant event in moving the Lake Charles LNG project towards FID,” he explained.

“We are experiencing strong demand for long-term offtake contracts for Lake Charles LNG and we are optimistic that we will be in a position to take a positive FID by year-end,” stated Mason.

“The Lake Charles LNG project is expected to be financed primarily through infrastructure funds and strategic partners, with Lake Charles LNG retaining an equity stake and operatorship of the liquefaction facility,” he added.

Lake Charles LNG will be constructed with the existing brownfield site of regasification facility and will capitalize on four existing LNG storage tanks, two deep water berths and other LNG infrastructure.

“Lake Charles LNG will also benefit from its direct connection to Energy Transfer’s existing Trunkline pipeline system that in turn provides connections to multiple intrastate and interstate pipelines,” said Energy Transfer.

“These pipelines allow access to multiple natural gas producing basins, including the Haynesville, the Permian and the Marcellus Shale,” the company declared.

Energy Transfer LP, based in Dallas, Texas, has agreed to acquire Enable Midstream Partners in an all-shares transaction valued at around $7.2 billion, further enhancing Energy Transfer’s connectivity to the LNG export market along the US Gulf Coast.