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.
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