Whistler Pipeline and Cheniere Energy (LNG) have started service on the ADCC Pipeline to the Corpus Christi LNG facility. The new 42-inch line is an important step for developing a natural gas trading hub at Agua Dulce, but we suspect will also prove a setback for transparency in the South Texas market.
The ADCC Pipeline began commercial service on July 1, developer Whitewater said in a July 12 release. The 40-mile pipe can transport up to 1.7 Bcf/d from Whitewater’s Agua Dulce header system in South Texas to the Corpus Christi Liquefaction (CCL) facility. ADCC is jointly owned by Whistler Pipeline (70%) and Cheniere (30%).
East Daley recently profiled the ADCC project. The new pipe will support the Stage 3 midscale expansion Cheniere is building at CCL. The company plans to make first LNG from the Stage 3 expansion by YE24 and bring the trains online in phases in 2025. In the meantime, the ADCC line gives Cheniere more flexibility to source gas at CCL, including access to Permian supply via Whistler.
Prior to ADCC start-up, Cheniere relied exclusively on the Corpus Christi Pipeline for feedgas at CCL. The 48-inch pipeline can move up to 2.75 Bcf/d to the LNG facility. Unlike many Texas pipes, the Corpus Christi line is regulated by the Federal Energy Regulatory Commission (FERC) as part of the larger CCL project and posts daily pipe nominations. Those nominations provide unusual visibility into demand at one of the largest industrial plants in Texas.
The start of the ADCC line will cloud this view. As a Texas intrastate system, ADCC is not required to disclose its own nominations and is unlikely to be picked up by pipeline scrapes, making it more difficult for traders and analysts to track activity. Pipeline data from IIR Energy shows deliveries to CCL (excluding ADCC) have averaged 2.0 Bcf/d to date in July ‘24 (see figure).
EDA forecasts the South Texas market in the Houston Ship Channel Supply & Demand Report. We view pipe scrapes as an important but inadequate tool to monitor the market, requiring an independent view of supply, demand and midstream trends.
While reducing market visibility, the new ADCC line will help move Permian gas further downstream via Whistler and contribute to the development of Agua Dulce as a trading hub. However, we do not expect a big near-term shift in the regional market since Whistler was already running full out of the Permian. – Andrew Ware and Oren Pilant Tickers: LNG.
Natural Gas Heading into a Super Volatility Cycle: We See It Coming Soon Online Webinar
East Daley is here to help you get ahead of volatility. Don't miss this exclusive webinar diving into the next volatility cycle starting with Natural Gas. East Daley Presents: Fast and Furious: Production, Constraints and Opportunity. This 3 part webinar series kicks off the 2nd part with the Natural Gas team on August 7th at 10 AM MST. Register here.
Propane Supply and Demand Report and Data Set: Coming Soon
Propane Supply and Demand is a Data File & Report that includes historical and forecasted supply and demand components for propane including gas plant propane production, refinery propane production, domestic demand from steam crackers and other consumption, plus propane (LPG) exports. Learn more about the Propane Supply and Demand Report and Data Set.
Sign Up for the Crude Oil Edge
East Daley’s Crude Oil Edge provides weekly updates on the US crude oil market including supply and demand fundamentals, basin-level views, and analysis of market constraints and infrastructure proposals. We explore sub-basin dynamics and provide market insights on crude oil flows, production growth, and import and export characteristics. Sign up now for the Crude Oil Edge.
The Daley Note
Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.
-1.png)