Published: April 1, 2022 |

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Energy Transfer has joined a growing list of energy companies looking to build the next pipeline to transport growing amounts of natural gas production from the Permian Basin, the largest U.S. shale field, in West Texas and eastern New Mexico to export hubs on the Gulf Coast.

“Given the proposed route and our ability to utilize existing assets, we believe we could complete construction of (the Permian) project in two years or less once we have reached FID (final investment decision),” Energy Transfer Co-Chief Executive Thomas Long told analysts on an earnings call late Wednesday.

With production growing fast in the Permian and demand rising from new liquefied natural gas (LNG) export plants on the Gulf Coast, several companies are already looking to add new gas pipelines in the region, including units of Kinder Morgan and MPLX.

Analysts at Mizuho said Energy Transfer likely squeezed past Kinder Morgan into the lead position to build the next Permian pipeline since Energy Transfer’s project could add around 1.5-2.0 billion cubic feet per day (bcfd) of transport capacity with only around 260 miles (418-kilometer) of new pipe.

Energy Transfer’s announcement “strikes us as the most economic option for the basin outside of capacity expansions on existing pipelines,” Mizuho said.

Energy Transfer also said it started building the Gulf Run pipeline in Louisiana to move gas from the Haynesville Shale in Texas, Arkansas, and Louisiana to the Gulf Coast.

The 1.65-bcfd Gulf Run is backed by a 20-year agreement with QatarEnergy (70 percent) Exxon Mobil Corp’s (30 percent) $10 billion Golden Pass LNG export plant under construction in Texas.

Energy Transfer’s Long said the company expects to complete Gulf Run by the end of 2022.

Marshall McCrea, Energy Transfer’s other co-CEO, told analysts the company was still working on its own LNG export project at Lake Charles in Louisiana.

“We hope to be able to announce some agreements that we are close to getting signed over the next few years,” McCrea said, noting the company was “still a ways from FID but we are really excited about where that project is going.”

Separately, Energy Transfer said it completed the last phase of its long-delayed Mariner East natural gas liquids pipeline expansion in Pennsylvania.

Source: Reuters

About Energy Transfer
Energy Transfer owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all of the major domestic production basins. ET is a publicly traded limited partnership with core operations that include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, NGL and refined product transportation and terminalling assets; NGL fractionation; and various acquisition and marketing assets. ET, through its ownership of Energy Transfer Operating, also owns Lake Charles LNG Company, as well as the general partner interests, the incentive distribution rights and 28.5 million common units of Sunoco, and the general partner interests and 46.1 million common units of USA Compression Partners.

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