July 2023, Vol. 250, No. 7


Alaska LNG Project Clears Challenge, Advances 800-Mile Pipeline

Biden Administration Backs MVP for Second Time  

The Biden administration twice supported the Mountain Valley natural gas pipeline during the week of May 15 – a project a key Democratic senator has pushed in legislation to speed permitting of fossil fuel and power transmission projects.

“The Bureau of Land management (BLM) issued a record of decision for the Mountain Valley Pipeline,” the office, part of the Department of Interior, said in a release. “The BLM is moving forward with the next step, processing the revised right-of-way application for the project.” 

As part of the decision, the company cannot start construction until it receives remaining federal and state permits, the official said. 

Sen. Joe Manchin (D-WV) introduced a bill to speed fossil fuel and transmission line projects to transport power from renewable projects  and calling  on the Biden administration to approve the pipeline that would run through his state. Manchin’s legislation is one of several proposals in Congress on permitting. 

The pipeline, which would unlock gas supplies from Appalachia, the country’s biggest shale gas basin, still needs review and permitting including in West Virginia. The project could still be held up or blocked by lawsuits from opponents. 

The U.S. Forest Service issued a permit allowing the pipeline to run through the Jefferson National Forest straddling Virginia and West Virginia. 

Operator Janaf, MOL Sign Deal for 2.9 Million Tons of Crude 

Croatia’s oil pipeline operator Janaf agreed to a deal to ship 2.9 million tons of crude on the Adriatic pipeline to MOL refineries in Hungary and Slovakia, according Janef.  

Janaf and MOL have been in protracted discussions over transit fees, which according to Reuters, centered raising fees on the pipeline to four times the benchmark charged on the Baku Tbilisi Ceyhan (BTC) Pipeline, according to Reuters.  

According to a statement from MOL, the company, without going into additional specifics, will pay an “exceptional premium” for a one-year contract. 

“MOL Group had no choice but to sign the agreement, as the Adria pipeline plays an important role in the security of supply in the (central European) region,” the statement read. 

Under the contract, Janaf will transport 2.9 million tons of oil and will store 79,385 cubic meters of oil at the Omisalj terminal on the island of Krk, as well as 70,000 cubic meters of crude oil at the Sisak terminal. 

MOL’s previous contract with Janaf for shipments of 500,000 tons of crude on the pipeline expired at the end of March. 

Mexico Pacific Spending $14 Billion on Pipeline, Plant 

Mexico Pacific plans to build a natural gas pipeline and liquefaction plant in the northern state of Sonora for about $14 billion, according to the office of President Andres Manuel Lopez Obrador.  

Mexican Foreign Minister Marcelo Ebrard had told journalists earlier in the day they had met with Mexico Pacific to discuss “a considerable investment in liquefied natural gas,” according to Reuters. 

Mexico Pacific’s website said the company is building a 14.1 mpta LNG export terminal in Puerto Libertad, Sonora. 

According to the president’s office “cooperation agreements” have been reached with recently merged rail operator Canadian Pacific Kansas City (CPKC), concerning rail projects in the south of Mexico. CPKC’s network extends through Canada and the United States and into central Mexico, with stops on the county’s Pacific and Gulf coasts. 

Alaska LNG Project Clears Challenge, Advances 800-Mile Pipeline 

A U.S. appeals court rejected a lawsuit from environmentalists questioning federal approvals on construction of a $39 billion pipeline project, designed to transport natural gas from Alaska’s North Slope across the state.

A three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia said FERC’s review of plans for the state-run Alaska Gasline Development Corp.’s project was in line with National Environmental Policy Act (NEPA) guidelines. 

The project would transport natural gas along a pipeline that bisects the state from north to south.  

Construction on the 800-mile pipeline and related infrastructure has not started, according to Tim Fitzpatrick, a spokesman for the developer. He said that they are in the process now of choosing investors. 

According to the decision, FERC adequately considered how noises, and ship traffic might adversely affect endangered beluga whales and how construction could affect wetlands. 

Additionally, the judges found FERC’s methodology for considering greenhouse gas emissions by comparing those to existing state and nationwide emissions was acceptable and that the commission was not required to consider the social cost of carbon metrics  as the lawsuit requested.

Energy Transfer Slams Denial of LNG Extension, Seeks Rehearing 

Energy Transfer slammed the U.S. Department of Energy’s (DOE) decision to withhold an export-permit extension on the Louisiana LNG export project and seeks a rehearing, according to seeking a rehearing, according to DOE documents.

The pipeline operator is seeking a three-year extension and, according to the company, one potential customer has suspended contract negotiations as a result. 

In a filing concerning the Lake Charles LNG project Energy Transfer wrote that the denial is a violation of U.S. law and the decision raises “serious constitutional concerns” about lack of due process. It adds the interpretation “will likely result in a project’s demise,” unless a request for reconsideration is upheld. 

“Lake Charles LNG is the most advanced LNG project in the United States that has not taken FID and we believe it satisfies the criteria for an extension,” company spokeswoman Vicki Granado said, according to Reuters. 

Energy Transfer claimed the extension is necessary due to unplanned delays and shortages of equipment needed for the project. If the extension is granted, the company is expected to make a formal investment decision on the project by the end of 2023. 

Comet Ridge, Jemena to Develop Mahalo North Gas Pipeline 

Comet Ridge signed a memorandum of understanding (MOU) and pre-FEED agreement with Jemena Ltd. to evaluate a new gas pipeline connection from Comet Ridge’s Mahalo North development to the Rolleston compressor station for entry into Queensland’s domestic gas network. 

Under the MOU and associated pre-FEED agreement, Jemena will immediately undertake a pre-FEED study of a Jemena-owned and operated high-pressure gas transmission pipeline of approximately 45 miles (73 km) from the Mahalo North Gas Project to Jemena’s Queensland Gas Pipeline (QGP). 

In November 2022, Comet Ridge announced the independent certification of 43 Petajoules of 2P Reserve and 110 Petajoules of 3P Reserve of natural gas for Mahalo North, following a pilot production test, which achieved “a very strong gas flow rate” of 1.75 MMcf/d.  

Comet Ridge plans to move these gas reserves into production quickly, leveraging the partnership with Jemena to provide the necessary infrastructure route to market. 

Such infrastructure would also unlock value in Comet Ridge’s other 100%-owned acreage, including Mahalo East, where the company has independently certified 31 Petajoules of 2C and 122 Petajoules of 3C Contingent Resource. The pre-FEED study will initially focus on delivering Comet Ridge with a pipeline connection from Mahalo North to the QGP for a minimum of 25 terajoules per day of gas supply to the domestic market. 

“Jemena’s gas pipeline would take a southerly route direct into Jemena’s own QGP, which gives us direct access to both Gladstone and Wallumbilla markets,” said Comet Ridge Managing Director Tor McCaul. “This gas production would have a slightly later start date but would allow a larger volume of Comet Ridge gas into the domestic gas market, allowing our other projects, at Mahalo East and Mahalo Far East, to feed in sequentially.”  

Prior to finalization of the studies and commencement of construction, the parties will consider a big enough pipeline to accommodate a much larger volume of gas from the entire Mahalo Gas Hub area. 

Caliche Launches Open Season for Expansion Project, Firm Natural Gas  

Caliche Development Partners II launched a non-binding open season to solicit natural gas firm storage service in support of the development of two additional natural gas storage caverns at Golden Triangle Storage (GTS) facility.

Caliche II’s Golden Triangle Storage, LLC in Beaumont, Texas. (Photo: Caliche)

GTS has a twin, 24-inch pipeline header connecting seven major pipeline interconnects in the Beaumont- Port Arthur market hub, soliciting interest in potential new connections to its facilities, including Whitewater – Blackfin, Venture Global – CP Express, Sempra – PAPTC, and Targa – Apex Intrastate Pipeline. 

The open season will provide the opportunity to bid for up to 14 Bcf (8 Bcf in cavern three and 6 Bcf in cavern four) of FSS capacity on a multiyear basis. Bids for between 0.500,000 MMcf and a full cavern of capacity will be accepted and evaluated. Injection and withdrawal rights will be limited to 600 MMcf/d per expansion cavern, totaling 1.2 Bcf/d for both expansion caverns. 

Bids for capacity must include a minimum of a 5-year term, with GTS giving greater consideration for longer terms (up to 20 years). GTS will not award any capacity pursuant to this Open Season until after economic analysis.

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