Cheniere Energy Plans to Build New Gas Pipeline to Feed LNG Expansion in Louisiana

(Reuters) — Cheniere Energy Inc., the largest U.S. LNG exporter, says it may build a new pipeline to link its Louisiana expansion project to other pipelines in major shale-gas producing regions as it seeks to diversify its risk.

Cheniere's Sabine Pass facility has been expanding since its production began in 2016 but needs additional natural gas beyond current supplies to reach its planned "Stage 5" capacity, top company officials said.

"We will likely build a pipeline to where we can access other pipelines. That will get us Haynesville (shale gas), any additional Marcellus (gas) that will come down, mid-continent, Permian as well as Eagle Ford as it continues to be developed," Corey Grindal, Cheniere's chief operating officer, told journalists last week.

Cheniere previously retooled some of its pipeline infrastructure to send gas to its Sabine Pass facility in Louisiana, but those pipelines now shoulder additional demand and are unavailable, Grindal said.

The exporter already spends $800 million a year in pipeline transit fees to transport 7.5 billion cubic feet per day (bcfd) of natural gas from 26 different pipelines to its LNG plants in Texas and Louisiana, CEO Jack Fusco also said in the interview with reporters at an LNG conference in Vancouver. He gave no detail about the new pipeline's cost or size.

Analysts said the project likely requires a small header system that aggregates gas from several lines.

"The expansion is adjacent to their existing Sabine Pass facility and would be supplied by a combination of new and existing pipes," Pilant said.

The new project is being designed to produce up to 20 million tonnes per annum (MTPA) of LNG but has not yet been funded, Cheniere said on its website.

Proposed LNG and gas pipeline projects in the Gulf Coast region have not faced the same environmental push back as elsewhere and should get approved, analysts said.

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