Williams (WMB) has postponed the in-service date for the Louisiana Energy Gateway (LEG) pipeline amid a legal dispute with Energy Transfer (ET). The delay raises the risk of an eventual market mismatch when new LNG projects begin service in Texas and Louisiana, according to East Daley Analytics’ Southeast Gulf S&D Forecast.
Speaking at the recent CERAWeek conference in Houston, Williams CEO Alan Armstrong confirmed start-up of the 1.8 Bcf/d pipeline would be delayed from 4Q24 until 2H25. WMB has not set a revised target to start service, but was able to re-route the segment of the pipeline at dispute with ET, Armstrong said.
And while East Daley hasn’t heard anything definitive, Momentum Midstream’s NG3 pipeline could also be delayed from an expected 3Q24 start in the Haynesville.
Both companies are tangled in lawsuits with Energy Transfer regarding the use of ET’s established rights-of-way to lay the new pipelines. ET argues its competitors should not be allowed to piggyback off its rights-of-way.
EDA does not anticipate any near-term constraints moving gas to the Louisiana Gulf Coast as a result of the delay. Based on our start-up estimates for the Plaquemines and Golden Pass LNG projects, we see sufficient egress capacity on ET’s Gulf Run and DTM Midstream’s (DTM) LEAP pipelines to meet new demand (see figure). We expect Venture Global to start Plaquemines LNG in 4Q24, and ExxonMobil (XOM) to begin operations at Golden Pass in 1Q25. Our regional outlook for supply, demand and pipeline capacity is available in the new Southeast Gulf S&D Forecast.
In the near term, greenfield projects like LEG or Momentum’s NG3 are not essential to supply Golden Pass and Plaquemines Phase 1, according to our regional model. However, as those LNG facilities ramp to full capacity by 2026, new pipelines will need to be built. Gulf Run, LEAP and NG3 have all guided to potential expansions totaling up to 3.5 Bcf/d.
Check out East Daley’s new Southeast Gulf S&D Forecast for more details regarding pipeline flows and potential constraints in Louisiana and East Texas. – Oren Pilant Tickers: DTM, ET, WMB, XOM.
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