April 2024, Vol. 251, No. 4


Projects April 2024

US Regulators Approve Mexico Pacific’s Saguaro Connector Pipeline 

U.S. energy regulators approved a cross-border pipeline that would export about 2.8 Bcf/d of natural gas from Texas to Mexico Pacific’s Saguaro LNG export plant on Mexico’s west coast. 

The approval is another step in the company's plan to build an about $15 billion plant in Mexico would ship super-chilled fuel processed from U.S. natural gas. 

Mexico Pacific LNG has yet to give the financial greenlight for the construction of the 15 mtpa plant. 

The Federal Energy Regulatory Commission’s ruling on the construction came weeks after the White House stalled export permit reviews by the Department of Energy. The administration wants the DOE to consider plants’ climate, consumer, and community impacts in its deliberations.

EU Approves $4.9 Billion German State Funds for Hydrogen Projects 

The European Commission endorsed $4.94 billion (4.6 billion euros) in German government funding for 24 German hydrogen projects. The initiative is part of Germany’s ambitious effort to become carbon neutral by 2045. 

Dubbed the Important Project of Common European Interest (IPCEI) funding, it will focus on green hydrogen production, transportation and storage infrastructure. 

During the summer, the German Cabinet laid out guidelines for hydrogen production, transport infrastructure and market plans for a core hydrogen network to build out more than 6,000 miles (9.700 km) of pipeline by 2032. 

Tallgrass, Bridger Begin Open Season for Pony Express Expansion 

Tallgrass Pony Express Pipeline, operated jointly by Tallgrass Energy and Bridger Pipeline, has initiated a new binding joint-tariff open season, inviting shipper commitments for crude oil transportation. 

The open season covers the Northwest portion of the Pony Express line, connecting Bridger Pipeline’s Guernsey Hub in southeast Wyoming to Pony Express’ Guernsey and Sterling origin terminals in Northeast Colorado. The 30-day open season offers incentive tariff rates to prospective shippers. 

This marks the fourth open season for different sections of the Pony Express Pipeline since March 2023. Interested shippers can access detailed information by contacting Tallgrass and signing a confidentiality agreement. 

The Pony Express Pipeline, extending over 830 miles with a capacity of 230,000 bpd, features a main line from Guernsey to Cushing, Oklahoma, and a secondary Northeast Colorado Lateral capable of delivering up to 90,000 bpd to Cushing. 

Russia’s Planned Gas Pipeline to China Faces Construction Delay 

Mongolian Prime Minister L. Oyun-Erdene said construction of Russia’s Power of Siberia-2 gas pipeline, expected to start this year, may be postponed, according to Financial Times

Russia has been in talks to build a new pipeline to carry 4.83 Bcf/d (137 MMcm/d) of gas a year from northern Russia to China via Mongolia. 

China and Russia have yet to agree on key details, according to the report, paper, adding that high global gas prices has complicated talks. 

“Those two sides still need more time to do more detailed research on the economic studies,” Oyun-Erdene told the FT. “The Chinese and Russian sides are still doing the calculations and estimations and they are working on the economic benefits.”  

Operator Gazprom said it wants to begin deliveries gas by 2030.  

Trans Mountain Pipeline Now Expects Q2 Launch, Cost Increase 

Trans Mountain still targets a second-quarter in-service date for its expansion and expects the project’s cost to rise 10%, regulatory filings reveal. 

The company told the Canada Energy Regulator, however, that commencement for firm service contracts with shippers is May 1, a one-month delay from its previous online date. 

The new commencement date is in line with Trans Mountain's most-recent estimate of starting service in the second quarter despite ongoing construction problems. 

Trans Mountain will provide another update to factor in actual costs after mechanically completion, the company said. The most recent estimate stands at $34 billion.   

Greater capacity will enable more Canadian crude to flow to refineries on the U.S. West Coast and in Asia. The expansion will nearly triple the flow of crude from Alberta to Canada’s Pacific Coast to 890,000 bpd.  

Canadian oil and gas producers will slightly increase capital spending this year in part because of the expansion, the Canadian Association of Petroleum Producers told Reuters.

Enbridge Investing $500 Million in Assets, Including Gray Oak  

Pipeline operator Enbridge upped its short-term profit growth forecast, added it will spend $500 million expanding pipeline and storage assets to boost its U.S. Gulf Coast presence.  

The Calgary, Canada-based company will spend $100 million expanding its Gray Oak oil pipeline in Texas, the Enbridge said during a call with media outlets. It will aso spend $200 million on offshore pipelines to service Shell and Equinor’s planned Sparta offshore oil and gas project in the Gulf. 

Enbridge raised its core profit growth forecast to between 7% and 9% through 2026 – from 4%-6% through 2025 – saying the increase is primarily driven by its $14 billion acquisition of three U.S. gas utility companies from Dominion Energy, according to Reuters.  

Enbridge operates North America’s biggest oil pipeline network, the Mainline, and said it expects Western Canadian oil production to grow by 500,000 bpd through 2025. The growth will fill pipeline capacity to 99% by 2026, executive vice president of Liquids Colin Gruending said recently. 

Additionally, Gruending said, the tripling of capacity on the Trans Mountain oil pipeline, scheduled for the second quarter, will not take a large volume from the Mainline. 

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