January 2025, Vol. 252, No. 1
Global News
Global News January 2025
DOE Holds Up Louisiana LNG Approvals Pending FERC Reviews
The U.S. Department of Energy (DOE) did not finish reviews of two Louisiana LNG projects, citing the need for the Federal Energy Regulatory Commission (FERC), to complete environmental assessments first.
The applications involve exports to countries that do not have free trade agreements with the United States.
The affected projects are Venture Global LNG’s CP2 20 mtpa facility and Commonwealth LNG’s planned 9.5 mtpa facility, both of which are located on the Gulf of Mexico coast.
The DOC said the decision was “consistent with precedent” during the administration of President Joe Biden and the previous two administrations.
In November, FERC pulled Venture Global’s authorization to construct CP2, requiring an additional environmental review of air quality impact. FERC has not disclosed how long that review will take.
CP2, which has been targeted by environmentalists seeking to limit future LNG projects on the U.S. Gulf Coast, won FERC construction approval in June.
The additional review was prompted by a U.S. Court of Appeals for the District of Columbia Circuit ruling that quashed FERC’s approval of NextDecade’s plant at the Port of Brownsville, Texas, and ordered FERC to reconsider the project ramifications.
Venture Global LNG criticized FERC’s call for an additional environmental review as unnecessary, saying the company was prepared to go forward with construction as soon as the project receives a final go-ahead.
FERC also delayed approval for the construction of Commonwealth LNG’s facility in Cameron. Commonwealth has said it was “confident” in its project and that all requested would provide all the required the supplemental environmental impact statement.
Aramco, SLB, and Linde to Develop Saudi Carbon Capture Project
Aramco, SLB and Linde signed an agreement to build a carbon capture and storage project in Jubail, Saudi Arabia. The captured CO2 from the project will be moved through pipelines and stored below ground in a saline aquifer sink
The project is intended to help Aramco to reach its target of net zero emissions from its operations by 2050. Saudi Arabia has a net zero target of 2060. The first phase is expected to be complete by the end of 2027, capturing and storing up to 9 mtpa of carbon dioxide.
Aramco will own 60% of the project, while SLB and Linde will hold 20% each, the companies said in a joint statement.
The three companies signed a preliminary agreement on the project in November 2022.
Phillips 66 to Sell Stake in 500-Mile Gulf Coast Express Pipeline
Phillips 66 is selling its 25% non-operated equity interest in the 500-mile Gulf Coast Express Pipeline to an affiliate of ArcLight Capital Partners for $865 million in cash.
The sale of DCP GCX Pipeline, which owns the stake in Gulf Coast Express, allows Phillips 66 to exceed its asset divestiture target $3 billion, which is among its strategic priorities.
“The evolution of our portfolio underscores our position as a leading integrated downstream energy provider, enhancing shareholder value and positioning the company for the future,” said Mark Lashier, chairman and CEO of Phillips 66.
The Gulf Coast Express Pipeline ships 2 Bcf/d of natural to the to the Agua Dulce area in Texas from the Permian Basin. Following the sale, the pipeline will be co-owned by subsidiaries of Kinder Morgan and affiliates of ArcLight Capital Partners.
Phillips 66 said the price reflects “an enterprise value-to-EBITDA multiple of 10.6x based on expected 2025 EBITDA.” Proceeds will be used to support the company’s strategic priorities, including shareholder returns and debt reduction.
Oil States Sells Houston Ship Channel Facility for $24.8 Million
Oil States International finalized its sale of the idled Houston Ship Channel facility, for $24.8 million in net proceeds. The sale is part of the company’s broader strategy to optimize its operations and improve financial flexibility.
The company announced the sale during its third-quarter earnings call, which outlined its efforts to exit underperforming U.S. business lines, consolidate operations, and invest in new technologies, such as managed pressure drilling (MPD) systems.
“The consolidation of our Houston operations and completion of the sale of our Houston Ship Channel facility combined with the repurchase of our common stock adds momentum to the execution of our long-term strategy and demonstrates our commitment to enhance stockholder value,” said Cindy B. Taylor, president and CEO of Oil States.
The proceeds from the facility sale, coupled with cash on hand and operating cash flows, are expected to help reduce the company’s net debt. Under its $50 million share repurchase program, Oil States has bought back 1.5 million shares of its common stock for $7.9 million.
Taylor said the company is focused on offshore and international growth opportunities, technology investments and domestic operational efficiency to maximize free cash flow and enhance shareholder returns.
‘Drill, Baby, Drill’ Unlikely, Says Exxon Executive
A senior executive at Exxon Mobil U.S. said recently that producers are unlikely to drastically boost production following the inauguration of Donald Trump, but rather companies will concentrate on capital discipline.
“We’re not going to see anybody in ‘drill, baby, drill’ mode,” Liam Mallon, head of Exxon’s upstream division, said the Energy Intelligence Forum conference held in London. “A radical change (in production) is unlikely because the vast majority, if not everybody, is focused on the economics of what they’re doing.”
Trump, who takes office Jan. 20, pledged during the election campaign to boost domestic oil and natural gas output. His transition team, according to Reuters, is in the process of preparing an extensive energy package to be rolled out in the first days of his presidency.
According Mallon, easing land permitting processing could provide a short-term boost to production. Other leaders, including bp CEO Murray Auchincloss told conference attendees he looked forward to the change in administrations, saying the GOP leadership will accelerate permitting times.
Energy Transfer Reaches FID on 2.2 Bcf/d Permian Pipeline
Energy Transfer reached a final decision to build the Hugh Brinson Pipeline (formerly the Warrior Pipeline), a $2.7 billion intrastate natural gas pipeline designed to move Permian Basin production to Texas markets and trading hubs.
The project’s first phase includes constructing 400 miles of 42-inch pipeline, with an initial capacity of 1.5 Bcf/d. It will connect the Waha area to Maypearl, Texas, south of the Dallas-Fort Worth Metroplex, linking to Energy Transfer’s extensive pipeline and storage network.
Additionally, a 42-mile, 36-inch Midland Lateral pipeline will be built to connect processing plants in Martin and Midland counties to the mainline.
Phase II plans include adding compression to boost pipeline capacity to 2.2 Bcf/d, depending on shipper demand. Both phases could be constructed simultaneously.
“This pipeline reinforces our commitment to meeting the growing natural gas demand, while supporting Texas’ power plants and data centers,” Energy Transfer said in a statement.
The project, backed by long-term, fee-based agreements with investment-grade customers, is expected to be operational by late 2026 and give shippers access to Energy Transfer’s network and major hubs across Texas, including Carthage and Katy.
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