Last Thursday (Oct. 9), ARM Energy and PIMCO announced a final investment decision (FID) on the 42-inch Mustang Express Pipeline. The $2.3B project is backed by an anchor shipper commitment from Sempra Energy’s (SRE) Port Arthur LNG Phase 2, which made FID in September.
Mustang Express will add 2.5 Bcf/d of new capacity from the Katy hub to Port Arthur and is expected to start service by late 2028. The project includes laterals between Katy and Tres Palacios and to the Golden Triangle storage facility near Port Arthur, providing optionality to access valuable storage on both ends of the pipeline. It also opens up a natural gas super-highway from the Waha hub through Katy to LNG demand on the Louisiana border, providing an outlet for volumes on the recently FID’d Eiger Express.
Less than 3 Bcf/d of pipeline capacity currently runs between Katy and the Gillis hub in Louisiana, limiting the amount of Texas gas supply that can reach the highest concentration of LNG demand growth. However, Mustang Express is the latest of several pipes in development to expand that corridor and build a seamless route from the Permian to Gillis-based LNG demand.
WhiteWater’s Blackfin Pipeline (3.5 Bcf/d) is nearing completion but needs the CP Express header (under construction) to properly connect to LNG demand at Venture Global’s (VG) CP2 LNG project. It’s not clear what other interconnects that line could have, so we forecast volumes to grow in line with CP2’s ramp schedule, starting in 2027. Kinder Morgan’s (KMI) Trident pipeline will add 2 Bcf/d by early 2027, supported by commitments from Golden Pass LNG. We expect these newbuild pipes will support prices at both the Katy and Waha hubs by reducing the risk of capacity constraints from wellhead to demand.
For a closer look at Gulf Coast supply and demand fundamentals, see East Daley’s Houston Ship Channel Supply & Demand report. – Oren Pilant Tickers: KMI, SRE, VG.
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