The Year Ends With a Flurry of Pipeline Construction in the US

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The Year Ends With a Flurry of Pipeline Construction in the US

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Pipeline contractors can look back on year 2019 as a banner year. Of the 134 active gas pipeline construction projects 46 will be completed by year's end and natural gas pipeline capacity is expected to increase between 16 and 17 billion cubic feet per day, according to the U.S. Energy Information Agency (EIA).

Pipelines to liquefied natural gas (LNG) export facilities figure prominently in the work. The 1.4 billion cubic feet per day MIDSHIP Pipeline of Cheniere is under construction and will connect natural gas supply from Oklahoma to the Sabine Pass LNG facility in Louisiana. The 400 million cubic feet per day Stratton Ridge Expansion of Texas East Transmission Co. was completed in the second quarter of 2019 and will allow for more deliveries to the Freeport LNG facility on the Texas Gulf Coast.

More than 40%, or 7.2 billion cubic feet per day, of the new pipeline capacity delivers natural gas to locations in the South Central region, which includes states such as Arkansas, Oklahoma and Texas. Many of the projects will provide additional takeaway capacity out of the Permian Basin in western Texas or enable additional Permian natural gas production to reach the interstate pipeline system.

It is significant that several of the new pipelines will cross over into Mexico, giving the capacity expansion an international dimension. The 2.6 billion cubic feet per day Valley Crossing Pipeline, for example, moves natural gas from the South Central region to Mexico and connects to the new Sur de Texas-Tuxpan pipeline, a 497-mile underwater project. Both were completed in 2019 and transports U.S. natural gas to the southern Mexican state of Veracruz.

The pipeline buildout in Mexico comes on the heels of far reaching regulatory changes which have opened the Mexican market. Coupled with the big jump in supplies from the United States, three additional pipelines will be completed to Central Mexico. The first of those is the El Encino-to-La Laguna Pipeline, which will supply power plants near the cities of Torreon and Gomez Palacio.

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