Home > Chemical News

Chemical News

Cheniere pipeline to carry Oklahoma natgas output gets positive environmental review

https://www.chemnet.com   Jun 22,2018 platts
Cheniere Energy's Midcontinent Supply Header Interstate Pipeline, which would boost takeaway capacity from Oklahoma's Anadarko Basin to support growing Gulf Coast demand for LNG exports, got a positive environmental review Thursday from the US Federal Energy Regulatory Commission.

The project would result in some environmental impacts, but these would be reduced to less-than-significant levels with mitigation that is planned and being requested, the agency said in its final Environmental Impact Statement.

Midship would augment Cheniere's feedgas supplies at its LNG export terminals and provide another outlet for producers in the prolific SCOOP and STACK plays to reach downstream markets. The Houston-based company has been ramping up production at its Louisiana terminal, while continuing to build two liquefaction units with plans for a third at its Texas facility.

"Due to the implementation of specialized construction techniques, the relatively short construction timeframe in any one location, and resource protection and mitigation plans designed to minimize and control environmental impacts for the Midship project, we conclude that minimal cumulative impacts would occur," FERC said in its report.

FERC said that if it issues a permit certificate for the project, it is recommending mitigation in addition to what the company plans. Among other things, it is asking that the operator, before construction, file a spring and well water quality sampling plan. It also wants Cheniere to file a horizontal directional drilling noise mitigation plan prior to work on sections crossing certain waterways.


RUNS THROUGH HEART OF SCOOP/STACK

S&P Global Platts Analytics is expecting robust growth from the SCOOP/STACK in its five-year forecast, and Midship is set to run right through the most active counties.

Dry gas production in the SCOOP/STACK averaged 2.6 Bcf/d in 2016, almost 3 Bcf/d in 2017, and is projected to average 3.8 Bcf/d this year and average 6.7 Bcf/d by 2023, assuming current drilling activity continues, Platts Analytics data shows. Of the 14 counties in the SCOOP/STACK, about 50% of all drilling activity occurs in Kingfisher, Canadian and Grady counties. Cheniere's proposal is for Midship to start in Kingfisher and then pass through these other counties before reaching its final destination in southeastern Oklahoma. Midship would provide firm transportation capacity to pipelines near Bennington, Oklahoma. Interconnects close to the Texas border facilitate delivery to Gulf Coast markets. The project is estimated to cost approximately $1.03 billion, the company has said. In Thursday's final EIS, FERC said the in-service date was estimated to be in late summer 2019.

The pipeline has precedent agreements with Devon Energy, Marathon Oil, Gulfport Energy and Cheniere's Corpus Christi export facility. The three foundation shippers and Corpus Christi have contracted for a combined 825 MMcf/d of firm transportation for a minimum of 10 years each. The pipeline will have a capacity of up to 1.4 Bcf/d.


REGION SEEING STRONG MIDSTREAM INTEREST

Besides Cheniere's Midship, other infrastructure under development that targets takeaway capacity from the Oklahoma shale plays includes Enable Midstream Partners' Cana and STACK Expansion and Wildcat projects.

In a research note to clients in February, Seaport Global Securities said that if output projections for the region are realized, there will be much new natural gas takeaway capacity needed in the years to come.

"In addition to LNG (Cheniere) and ENBL (Enable), EnLink Midstream Partners has extensive natural gas processing and crude oil gathering assets in the area and could be a candidate to build a takeaway pipeline in the future," SGS said. "Keep in mind that the gas from the deep STACK is dry and requires no processing, so additional processing capacity will not be needed to service this production."
 Print  |    add to Favorites  |    Close