LNG

TC Energy Corp., whose activities include the building and ownership of pipelines in the US, Mexico and Canada and the LNG project called Coastal GasLink in British Columbia, has held an investor day with forecasts of a surge in feed gas for US Gulf Coast LNG and more progress on the spin-off of its liquids business.

TC Energy’s five divisions include Canadian Natural Gas Pipelines, US Natural Gas Pipeline, Mexican Natural gas Pipeline, Liquids Pipeline and Energy and Power Solutions.

François Poirier, TC Energy’s President and Chief Executive, told investors that the Coastal GasLink was completed while its US Southeast Gateway venture was on track for costs and schedule.

TC Energy’s presentation showed that the Calgary-based company was providing 30 percent of US LNG feed gas which is set to surge to 40 billion cubic feet per day of supply for liquefaction in the years ahead.

LNG wave

“We are well positioned to capture the next wave of LNG exports,” said the CEO.

At the start of October 2023 TC Energy completed the sale of 40 percent stakes for a total of C$5.3 billion (US$3.9Bln) in two US assets, Columbia Gas Transmission and Columbia Gulf Transmission, transporters of 20 percent of US LNG feed-gas volumes.

The company confirmed that the Columbia Gas and Columbia Gulf transactions were completed to the buyer, the New York-headquartered asset management firm Global Infrastructure Partners.

The Columbia Gas and Columbia Gulf pipelines span more than 15,000 miles across the North American natural gas network and are underpinned by strong long-term natural gas supplies and a rate-regulated commercial framework.

Southeast Gateway

“The Southeast Gateway Pipeline project continues to progress with its US$4.5Bln cost estimate and schedule,” said the company.

“TC Energy has made significant progress against its 2023 priorities, including project execution, deleveraging and maximizing the value of its asset base, which continues to generate excellent operational and financial results through all points in the economic cycle,” investors were told.

They were also told that the Liquids Pipelines business spin-off would be called South Bow Corp.

“South Bow symbolizes the historical roots of the company in Alberta, Canada, while acknowledging the pipeline system's strategic path southwards to the strongest US refining markets in the Gulf Coast and Midwest,” stated TC Energy.

“After a strong October and reflecting strength in the US dollar, the 2023 comparable EBITDA is now expected to be approximately 8 percent higher than 2022,” the company explained.

2024 priorities

“The company reaffirms its priority areas for 2024 and provides its expected comparable EBITDA growth outlook of 5 percent to 7 percent from 2023 to 2024, excluding any potential impact of its announced asset divestiture program, and prior to giving effect to the spin-off, which is expected to take place in the second half of 2024,” said TC Energy.

CEO Poirier added that over the past few years, TC Energy has been strategically pivoting capital to optimize its portfolio, leveraging core competencies and capturing the long-term growth potential in the natural gas and power businesses.

“Focusing on the value that can be delivered with two distinct strategies, the spin-off will unlock the evident value we see from each company’s unique opportunity set,” the CEO added.

“Subject to the requisite shareholder and regulatory approvals, upon closing of the spin-off transaction, South Bow is poised to be a low-risk liquids transportation and storage business, and with its anticipated investment-grade credit ratings, it can respond quickly in a market where it holds significant competitive advantages,” Poirier declared. 

The US Potential Gas Committee (PGC) has released its long-awaited report showing that the world’s No. 1 liquefied natural gas exporting nation has record natural gas resources in the prime basins in terms of recoverable gas and reserves.

May 26 (LNGJ) - The US National Oceanic and Atmospheric Administration (NOAA) said this year's Atlantic hurricane season, which could possibly disrupt oil and gas activities and LNG cargo loadings on the Gulf Coast, will bring an average number of ocean storms and hurricanes. NOAA forecasters estimate that there will be 12 to 17 named storms of which five to nine of those could develop into hurricanes and one to four will become major hurricanes during the June-to-November hurricane season.

   “However, the hurricane season in the central Pacific region is expected to be slightly busier this year, compared to a normal season,” said Matthew Rosencrans, the NOAA’s lead seasonal hurricane forecaster. “A key factor influencing our forecast is the predicted arrival of El Niño this summer, which typically contributes to an increase in tropical cyclone activity across the Pacific Ocean basin,” added Rosencrans.

INEOS, the UK-based European chemicals company with increasing LNG interests, is entering the US oil and gas production sector for the first time with the acquisition of a portion of Chesapeake Energy’s assets in the Eagle Ford shale basin in south Texas for $1.4 billion.

Chevron Corp., the US major with large overseas liquefied natural gas interests, has signed an accord on US natural gas development for Gulf Coast LNG feed-gas pipeline volumes from the prolific Haynesville Basin as well as for oil and gas in the deepwater Gulf of Mexico with pipelines group Williams.

The agreement involves Williams providing natural gas gathering services to Chevron’s 26,000-acre Haynesville assets while Chevron has agreed to a long-term capacity commitment on the Louisiana Energy Gateway project led by Williams.

The Williams-led Louisiana Energy Gateway project is designed to gather gas in the Haynesville and connect to markets, including the Transcontinental Gas Pipe Line (Transco) and LNG exports.

The Gateway project is designed to gather “responsibly-sourced natural gas” produced in the Haynesville for growing industrial and LNG export demand along the Gulf Coast.

Additionally, Williams has agreed to use existing infrastructure to serve increased production from the Blind Faith platform, located 160 miles southeast of New Orleans in the Gulf of Mexico.

US and overseas

“This is a great example of Williams and Chevron working together to accelerate the development and delivery of natural gas to supply affordable, reliable, ever cleaner energy both here in the United States and overseas,” said Alan Armstrong, President and Chief Executive of Tulsa, Oklahoma-based Williams.

“We are proud to take another step in advancing the output potential of two of the most prolific production areas in North America,” stated Armstrong.

Chevron has a large overseas portfolio as well as its US natural gas interests, including operatorships of the Australian Gorgon and Wheatstone LNG export plants in Western Australia as well as the Angola plant in southwest Africa.

Williams handles one-third of natural gas supplies in the US with major positions in the main supply basins through its ownership of more than 32,000 miles of pipelines, including Transco, the nation’s largest-volume system.

As part of the Haynesville agreement, Williams said it planned to construct a greenfield gathering system in support of Chevron’s acreage with connectivity to the Williams Gateway project.

Gateway schedule

The Gateway project is expected to go into service in 2024 and is a key component of the Williams lower-carbon, wellhead-to-water strategy.

Williams noted that the Gateway project is ideally positioned to incorporate carbon-capture and storage as a further decarbonizing solution for natural gas production in the rapidly growing Haynesville basin.

In the deepwater Gulf of Mexico, Chevron is developing the Ballymore tieback to the Blind Faith platform.

The project, which involves three production wells tied back via one flowline to the nearby Blind Faith facility, has a design capacity of 75,000 barrels of crude oil per day.

Using existing connections to Blind Faith, Williams will provide offshore natural gas gathering and crude oil transportation services as well as onshore natural gas processing services for the production.

Chevron is the operator of the Ballymore project with a 60 percent working interest. The co-owner is French major TotalEnergies with a 40 percent working interest.

Freeport LNG, the exporter of around 20 percent of US cargo volumes from three Trains on Quintana Island in Texas, has been hit by an explosive incident inside the facility and will shut for at least three weeks, affecting deliveries particularly to Japan.

ExxonMobil Corp. posted a fourth-quarter loss of $20.1 billion because of write-offs for American gas assets compared with a $5.7Bln profit in the same three months of 2019 as the CEO said that income was boosted by LNG and liquids as well as Permian Basin shale activities.

TC Energy Corp., one of North America’s leading pipeline companies involved in multiple projects such as bringing feed-gas to the LNG Canada project and US gas supplies to Mexico, said it was disappointed with the expected action to revoke the existing Presidential permit for its Keystone XL pipeline.

TC Energy, based in Calgary in the Canadian province of Alberta, said the decision by the new US Administration would impact thousands of union jobs, new renewable energy investments and opportunities for Indigenous communities.

“The decision would overturn an unprecedented, comprehensive regulatory process that lasted more than a decade and repeatedly concluded the pipeline would transport much needed energy in an environmentally responsible way while enhancing North American energy security,” said TC Energy.

The initial permit award by the previous Administration to construct the Keystone oil pipeline resulted in an additional investment of around US$8Bln.

This 1,947km (1,210-mile) pipeline was designed to deliver 830,000 barrels per day of crude oil from Hardisty in the Canadian province of Alberta to the US state of Nebraska.

It would then have connected with existing facilities to reach US Gulf Coast refiners to meet critical needs for transportation fuel and manufactured products. Keystone XL had been expected to be placed into service in 2023.

As part of the funding plan, the provincial Canadian government of Alberta had agreed to invest around US$1.1Bln as equity in Keystone XL which substantially covered some construction costs.

TC Energy said the action by the Biden Administration on the Keystone XL would directly lead to the lay-off of thousands of workers and negatively impact ground-breaking industry commitments as well as “historic” equity partnerships with native North Americans.

It is the second Canadian-led multi-billion dollar project to be cancelled by the new US Administration following the reversal of a construction permit for the Jordan Cove LNG project in the northwest US state of Oregon being developed by Calgary-based Pembina Pipeline Corp.

TC Energy said it would review the US decision, assess its implications, and consider its options.

At the same time, TC Energy declared that the news from Washington DC was very disappointing and extended its regrets to the many, many thousands of people affected.

“TC Energy is thankful to its customers, American and Canadian workers, our partners the Government of Alberta and Natural Law Energy, labor organizations, industry, the Government of Canada and the countless supporters of this important energy infrastructure project,” the company declared.

TC Energy added that the revocation of the permit means that the advancement of the project is now officially suspended.

“The company will cease capitalizing costs, including interest during construction, effective January 20, 2021, being the date of the decision, and will evaluate the carrying value of its investment in the pipeline, net of project recoveries,” explained TC Energy.

Among its other projects, TC Energy is also building the Coastal GasLink Pipeline from Dawson Creek to the Royal Dutch Shell-led LNG Canada project at Kitimat in British Columbia.

That pipeline will be 670 kilometres (416 miles) in length and provide feed-gas for the liquefaction plant currently under constructed.

Once completed, the pipeline will connect abundant Western Canadian Sedimentary Basin natural gas supply to the Shell-operated liquefaction plant.

TC Energy informed investors that if there were no intervening actions on Keystone, this US action would result in a potentially large non-cash after-tax charge to earnings in the first quarter of 2021.

“Our base business continues to perform very well and, aside from Keystone XL, we are advancing $25 billion of secured capital projects along with a robust portfolio of other similarly high quality opportunities under development,” said François Poirier, TC Energy’s President and Chief Executive.

“These initiatives are expected to generate growth in earnings and cash flow per share and support annual dividend increases of 8 percent to 10 percent in 2021 and 5 percent to 7 percent thereafter,” added the CEO. 

Stabilis Energy Inc., the provider and distributor of liquefied natural gas as a fuel for customers in North America, has extended its reach into Mexico with the completion of an acquisition and a key joint venture program.

Otto Energy, an Australian independent oil and gas exploration and production company, has seen its shares surge more than 40 percent this week after it announced an onshore natural gas discovery in Matagorda County in South Texas that could go into production as early as March.