Edition 44 – Monday, March 4, 2019

Welcome to this busy Monday edition of GasNewsOnline.com.  With cold weather gripping much of the United States, we will cover the latest critical postings from the interstate gas pipeline grid along with a few news stories from the energy business, and, of course, take a look ahead at the temperature forecast from the National Weather Service.  It is all FREE from GasNewsOnline.com.

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Cheniere Energy, Inc. and Bechtel Oil, Gas and Chemicals, Inc. announced today that Substantial Completion of Train 1 of the Corpus Christi liquefaction project was achieved on Thursday, February 28, 2019. Commissioning is complete and Bechtel has turned over care, custody, and control of Train 1 to Cheniere.

“Train 1 at Corpus Christi has achieved Substantial Completion, becoming the first liquefaction train placed into operation at a greenfield liquefaction facility in the lower 48 states,” said Jack Fusco, President and CEO of Cheniere. “This momentous achievement was made possible by Cheniere’s professionals and our EPC partner, Bechtel, who worked diligently together to ensure a seamless transition from construction to operations. I’d like to thank the Cheniere team and Bechtel for their world class execution, which has enabled us to continue our impeccable record of bringing trains online safely, ahead of schedule, and within budget.”

“The entire Bechtel team is very proud of our contribution to Cheniere’s success on the U.S. Gulf Coast, as we hand over custody of this historic first Texas LNG train,” said Brendan Bechtel, Chairman and Chief Executive Officer of Bechtel. “It was three years ago that we were able to support Cheniere’s entry into the LNG export market with Train 1 at the Sabine Pass Liquefaction project. With five trains now completed and operating well ahead of schedule, we are excited to continue working alongside Cheniere to deliver their next wave of trains with the reliability of outcome that Cheniere and Bechtel have become known for delivering. This program is a great example of how a one-team approach can bring world-class results, and I want to congratulate Jack and the Cheniere team for fostering this environment of collaboration and mutual success.”

Under sale and purchase agreements (“SPAs”) with Endesa S.A. and PT Pertamina (Persero), the date of first commercial delivery is expected to occur in June 2019, upon which the term of each of these SPAs commences. Additionally, bridging volumes are expected to begin in June 2019 under an SPA with Iberdrola, S.A.

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Last Friday, Cheniere announced that Midship Pipeline Company, LLC has issued Notice to Proceed to Strike, LLC, M.G. Dyess, Inc., TRC Pipeline Services, LLC, and Cenergy, LLC to construct the Midship natural gas pipeline and related compression and interconnect facilities (the “Midship Project”). The Midship Project received final Notice to Proceed from the Federal Energy Regulatory Commission in February 2019 and is expected to be placed in service by the end of 2019. Midship Pipeline is indirectly and jointly owned by Cheniere and EIG.

To complete financing of the Midship Project, Midship Pipeline entered into senior secured credit facilities with total commitments of up to approximately $680 million. The credit facilities consist of an approximate $615 million construction loan facility and a $65 million revolving credit facility. Proceeds from these credit facilities will be used to fund a portion of the costs of developing, constructing, and placing into service the Midship Project, to fund working capital requirements, and for related general corporate purposes.

The Midship Project is being developed to create pipeline capacity of up to 1,440,000 Dekatherms per day of firm transportation to connect production from the emerging STACK and SCOOP resource plays in the Anadarko Basin in Oklahoma to growing Gulf Coast and Southeast markets. The Midship Project is expected to consist of approximately 200 miles of 36 inch diameter new mainline pipeline, several laterals, compressor stations and interconnects that will provide receipts from STACK and SCOOP processing plants and provide deliveries to Bennington, Oklahoma, as well as access to downstream markets including the TexOk hub near Atlanta, Texas, and the Perryville Hub near Tallulah, Louisiana. Midship Pipeline has secured commitments from subsidiaries and/or affiliates of Cheniere, Devon Energy Corporation, Marathon Oil Corporation, and Gulfport Energy Corporation.

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Also on Friday, TransCanada Corporation announced the Federal Energy Regulatory Commission (FERC) had approved the full in-service of its Mountaineer XPress (MXP) project, allowing the company to increase the flow of gas on MXP and begin operating its Gulf XPress (GXP) project. The projects are a vital link between Appalachian natural gas supplies and growing markets in the U.S. and beyond.

“Mountaineer XPress and Gulf XPress are extremely important to TransCanada as they provide much-needed takeaway capacity for our customers, while also growing our extensive footprint in the Appalachian Basin,” said TransCanada President and Chief Executive Officer Russ Girling. “Both projects will also deliver attractive long-term returns and stable cash flow for our shareholders.”
                                                         
Designed to deliver clean, affordable, domestically produced natural gas, MXP is comprised of 170 miles of 36-inch-diameter pipeline, three new compressor stations, and modifications to three existing compressor stations – representing an investment of approximately US$3.2 billion. The pipeline is capable of transporting 2.7 billion cubic feet of natural gas per day to the TCO Pool and Leach markets on the Columbia Gas Transmission System. MXP is underpinned by long-term contracts with customers.

Partial in-service of the approximately US $600-million GXP project includes placing into service four new compressor stations located in Kentucky, Tennessee and Mississippi. Together, these facilities will provide additional capacity of 530,000 million cubic feet of natural gas per day on the Columbia Gulf Transmission System, which equates to approximately 60 percent of the project’s total capacity. GXP is also underpinned by long-term contracts with customers and is expected to be placed into full service in the coming weeks.

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With cold weather gripping the majority of the nation on Monday, several interstate gas pipelines posted operational notices on their electronic bulletin board systems to start the new week:

ANR Pipeline:

ANR is performing planned maintenance at its LaGrange Compressor Station on its Tie-Line located in Indiana in the Northern Fuel Segment (Zone 7). ANR will reduce the LaGrange Westbound location (LOC #314515) capacity by the following:

175-MMcf/d (leaving 525-MMcf/d available) 3/12 – 3/15

Based on current nominations, it is anticipated that this posting will result in the capacity allocation reduction of IT and Firm Secondary volumes. This posting will be updated as more information becomes available.

El Paso Natural Gas:

Pipeline Conditions – Permian Basin Weather Concerns 

The Permian supply basin is experiencing significant underperformance issues related to the winter weather that moved in overnight. Actual receipts into the system are approximately 545 MM below scheduled quantities for Gas Day March 4 (79% of schedule). A combination of freeze-offs and power outages coupled with road closures are impacting the ability of receipt point operators to restore supply to the system.  The Permian Basin overnight lows tomorrow morning are forecast again to be significantly below the seasonal average and additional supply underperformance is anticipated. 

Delivery point operators are encouraged to review their scheduled supplies to ensure that they are aligned with their flowing quantities.  Supply operators are encouraged to maintain their deliveries into the EPNG system at their scheduled rates.  Underperformance caps will be placed on underperforming supplies and if necessary EPNG will declare an SOC for DRAFT condition. 

Imbalance payback off the system, such as Make-Up Delivery (MD) transactions, may be limited or denied due to operational concerns related to maintaining adequate linepack. 

Washington Ranch is fully operational.

Gulf South Pipeline:

Index 300 Maintenance Pig Run:  March 20 – March 21, 2019 and again beginning March 27 – March 28, 2019

Capacity could be impacted by up to 25,000 dth/d for the duration of the maintenance. Based on current nominations and operational conditions Gulf South does not anticipate any customer impact.

Mobile Bay Delivery Scheduling Group – Capacity could be impacted by up to 150,000 dth/d for the duration of the maintenance.

Moss Point System Scheduling Group – Capacity could be impacted up to100,000 dth/d for the duration of the maintenance.

Northern Border Pipeline:

Effective immediately, Northern Border Pipeline is issuing an OFO watch.

Northern Border is concerned about the operational integrity of its system as a result of extremely cold weather. The OFO watch is in effect through gas day March 8th, in order to allow for the Northern Border pipeline system to regain its operational integrity. Northern Border has limited flexibility to manage imbalances and strongly encourages all shippers manage their system requirements to ensure the matching of receipts and deliveries daily. Absent voluntary imbalance management by shippers to ensure daily balancing, Northern Border may be required to take further action, including the immediate issuance of an imbalance Operational Flow Order.

If further action is required, it may be necessary for that action to become effective immediately, with no additional prior notice available.

Northern Natural Gas:

A System Overrun Limitation (SOL) has been called for all Market Area zones (ABC, D and EF) with 0% System Management Service (SMS) available for Gas Day Tuesday and Wednesday, March 5 and 6, 2019, due to lower than normal forecasted system weighted temperatures.

Northwest Pipeline:

Effective for gas day Wednesday, March 6, 2019 and until further notice, Northwest is revising its current Overrun Entitlement as follows:

Receiving Party locations north of the Plymouth South constraint point, including the Spokane and Wenatchee laterals, will be revised from a Stage I (3%) Overrun Entitlement to a Stage III (13%) Overrun Entitlement.    

For Receiving Party locations between the Kemmerer compressor and the Plymouth South constraint the Stage II (8%) Overrun Entitlement will be lifted.

Even though the Entitlements are being changed or lifted, Northwest is not allowing balancing off the system. Customers can avoid future Entitlements by procuring sufficient supply for their market needs.

Panhandle Eastern Pipe Line:

On Sunday, March 3, Panhandle Eastern Pipe Line experienced a rupture downstream of the Centralia Compressor Station. This outage will require a section of the 400 Line to be shut-in for repairs, reducing mainline capacity.

Effective immediately, until further notice, Panhandle will be limiting nominations through Haven to 1,125,000 MMBtu/day, with gas scheduled in accordance with Section 8.8 (c) of Panhandle’s FERC Gas Tariff. This outage will be considered a Force Majeure event pursuant to Section 20 of Panhandle’s FERC Gas Tariff. 

Shippers are encouraged to bring in physical flowing gas from their Primary receipt point, or physical market area receipt meters downstream of this outage in order to avoid the constraint, and potential scheduling reductions of their nominated activity.  

The cold weather restrictions outlined in Critical Notice ID 8196 will remain in effect. Panhandle will be requiring all Enhanced Firm Transportation (EFT) shippers to limit their physical deliveries (takes) to a one-sixteenth hourly rate of the nominated volume. 

Updates on the impact to shipper nominations will be posted as they become available.

Southern Natural Gas:

Based on the weather forecast predicting colder temperatures as well as the corresponding increase in projected demand on Southern’s north and south systems, we are notifying all Shippers that the existing Type 3 Level 1 OFO is being upgraded to a Type 3 Level 2 OFO and is also being expanded to include all of the following groups listed below effective the start of the gas day, Tuesday, March 5, 2019 until further notice.
OFO Type 3 Level 2: Daily Demand Exceeds Capacity

TARIFF SECTION 41.2
EFFECTIVE DATE: March 5, 2019
EFFECTIVE TIME of OFO: 9:00 AM (CCT)

PENALTY: $15.00 + Highest Regional Daily Price* per Dth for quantities taken in excess of the tolerance

TOLERANCE:  Greater of 102% of the Daily Entitlement or 200 dth

Southern Star Central Pipeline:

System Advisory Notice:

Southern Star Central Gas Pipeline is issuing a Storage notice to protect the integrity of SSCGP’s storage facilities. A number of storage customers have inventory levels at or below five percent (5%). This issuance requires all TSS, STS, and FSS customers to have inventories at or above zero (0 %) and asks TSS and STS customers to also ensure they have at least one (1) day of inventory available. Failure to voluntarily comply could result in the issuance of an Operational Flow Order (OFO).

Tennessee Gas Pipeline:

EMERGENT REPAIR AT STATION 323A – SEGMENT 324 – EFFECTIVE 3-05-19 

Pursuant to Article XII of the General Terms and Conditions of Tennessee’s FERC Gas Tariff, Tennessee is posting notice of an emergent repair issue impacting a unit at Station 323A in Pike County, PA. Tennessee has personnel on site and repairs are underway. Tennessee is estimating the current impact to be up to 200,000 Dths at Segment 324 (FH). Based on current nominations, Secondary Out of the Path nominations and Secondary In Path nominations pathed through Segment 324 (FH) are at risk as early as Timely Cycle for the Gas Day of Tuesday, March 5, 2019.

Also on Tennessee Gas…

Due to a forecast of colder weather and higher demand moving across most of the system, effective for the Gas Day of Monday, March 4, 2019, and until further notice, Tennessee Gas Pipeline, L.L.C.  (“Tennessee”) is implementing an  OFO Daily Critical Day 1 for all of Zones 2, 3, 4, 5 and 6 for all Balancing Parties (including LMS-PA, SA contracts acting as balancing parties, LMS-MA, and LMS-PL balancing parties).  This action is pursuant to Article X, Section 4 of the General Terms and Conditions of Tennessee’s FERC Gas Tariff.  

All delivery point operators in all of Zones 2, 3, 4, 5 and 6 are required to keep actual daily takes out of the system equal to or less than scheduled quantities regardless of their cumulative imbalance position.  All receipt point operators in all of Zones 2, 3, 4, 5 and 6 are required to keep actual daily receipts into the system equal to or greater than scheduled quantities regardless of their cumulative imbalance position.  In addition, it is essential that delivery point operators schedule gas at meters commensurate with takes within the affected areas.  All LMS-PA, SA contracts acting as balancing parties, LMS-MA and LMS-PL Balancing Parties are required to maintain an actual daily flow rate not exceeding 2% of scheduled quantities or 500 dths, whichever is greater for under-deliveries into the system and over-takes from the system. Customers will be assessed a rate of $5.00 plus the applicable Regional Daily Spot Price per dekatherm for that portion of physical quantities related to under-deliveries by receipt point operators and over-takes by delivery point operators which exceed this tolerance. 

THIS DAILY OFO CRITICAL DAY 1 WILL REMAIN IN EFFECT UNTIL FURTHER NOTICE. TENNESSEE WILL INFORM CUSTOMERS BY EBB WHEN THIS OFO WILL BE LIFTED.

Texas Eastern Transmission:

Due to impending colder weather, in order to maintain the operational integrity of the system, TE is issuing an Operational Flow Order (OFO) pursuant to Section 4.3 of the General Terms and Conditions of TE’s FERC Gas Tariff effective 9:00AM CCT Tuesday, March 5, 2019 to all parties, with the exception of those governed by a FERC gas tariff, in Texas Eastern’s Market Area Zone M2-30.

This OFO does not affect the ability of TE to receive or deliver quantities of gas for scheduled nominations to any customer or pipeline.

During the effectiveness of this OFO, all parties must be balanced such that actual deliveries of gas out of the system must be equal to or less than scheduled deliveries out of the system. The penalty shall apply to each dekatherm of actual delivery quantities that exceeds the greater of 2,000 Dth or 102% of scheduled delivery quantities.

During the effectiveness of this OFO, all parties must be balanced such that actual receipts of gas into the system must be equal to or greater than scheduled receipts into the system. The penalty shall apply to each dekatherm of actual receipt quantities that are less than scheduled quantities minus 2,000 Dth or 98% of scheduled receipt quantities.

The penalty will be equal to three times the daily Platts Gas Daily “Daily Price Survey” posting for the High Common price for the geographical region, as defined in Section 8.5(a) of the General Terms and Conditions of TE’s FERC Gas Tariff for the day on which such violation occurred. In addition, TE will not permit retroactive nominations to avoid an OFO penalty.

TE may be required to issue an hourly OFO pursuant to General Terms and Conditions Section 4.3(H) to impose further restrictions in order to maintain the operational integrity of the system.

Texas Gas Transmission:

Below normal temperatures have moved into the Texas Gas service area for the first part of this week. While it is fully expected that all primary firm service obligations will be met, the following services/activities are subject to scheduling reductions until further notice:

Imbalance Payback from Transportation Service Provider

Park Withdrawal

Loan

ISS Withdrawal

FSS Overrun Withdrawal

Interruptible and out-of-path Firm Transportation

Additionally, Texas Gas is requesting all shippers take deliveries within their contractual hourly rights so that receipts and Deliveries match their associated scheduled quantities. 

If shippers do not voluntarily comply with these provisions, Texas Gas may be forced to issue an Operational Flow Order, which could result in penalties for shippers.

Transcontinental Gas Pipe Line Company:

Subject:Operational Flow Order – Imbalance

Transco recently provided notice of limited flexibility to manage imbalances and recommended shippers maintain a concurrent balance of receipts and deliveries. In order to ensure system integrity, maintain safe operations, manage imbalances, and handle within-the-day volatility, Transco is issuing an Imbalance Operational Flow Order (OFO).

Effective:    Tuesday, March 5, 2019 and until further notice

OFO Areas:  Zone 6

Tolerance %:  5% for gas Due from Shippers

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The National Weather Service six-to-ten day forecast into March 14 is showing that Texas and most areas east of the Mississippi River will show a warming trend while temperatures remain below normal over the Upper Midwest, the Rockies, and the West Coast regions. 

That’s all for this chilly Monday edition of GasNewsOnline.com.  Please come back on Thursday for an update on the interstate gas pipeline conditions expected for the weekend. 

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