Pipeline gets official green light
Cheniere Energy Inc. hopes to begin work on its $1 billion Midship Pipeline soon, now that it has obtained approval for the project from the Federal Energy Regulatory Commission.
The 200-mile-long pipeline will start in Kingfisher County and head south and east to southeastern Bryan County on the Oklahoma/Texas line, where it will hook into the nation’s interstate pipeline system.
Once it becomes operational in the third quarter of 2019, it will have the capacity to carry 1.44 million dekatherms (about 1.44 billion cubic feet) of natural gas per day out of Oklahoma’s SCOOP and STACK fields.
The STACK and SCOOP fields are part of the Cana Woodford Basin, which is the third most active oil and natural gas field in the country, according to Baker Hughes. The area had 65 active rigs last week.
While it may take processing capacity in those fields a bit to catch up, a Cheniere spokesman said the supply the line will carry will boost the availability of natural gas for the nation, plus provide a ready source of product that ultimately can be exported from the U.S. via liquefied natural gas (LNG) terminals.
Cheniere’s main business is LNG exports, with one established, still-growing terminal in southwestern Louisiana, and another about to begin initial operations in Corpus Christi, Texas.
“This will get natural gas to into the U.S. pipeline system for other power and industrial demand sources and to our LNG export platforms,” Eben Burnham-Snyder, Cheniere’s communications vice president, said.
Tony Say, a natural gas analyst and president of Oklahoma City-based Clearwater Enterprises, is interested in how Midship will impact STACK and SCOOP producers, as they’ve been selling
natural gas at a discount to midstream firms that gather and process the product in those areas.
“That’s a lot of gas that will add up, over time,” he said. “It will make an impact — anything that can move natural gas out of that part of the state is a big deal.”
Project details
With the project’s approval, Cheniere is answering final questions from the regulator as it awaits a notice to proceed with the work. Burnham-Snyder said the agency usually issues that notice within 30 days of approval, meaning construction could start before the end of September.
Cheniere estimates the project will create 1,300 jobs during peak construction and 10 to 15 permanent jobs to operate the line.
Officials have said the company expects it will pay $200 million in ad valorem taxes during Midship’s first 10 years of operations that will benefit counties the line passes through and local communities along its route.
Midship is expected to transport natural gas from several of the state’s most active producers. Devon Energy Corp., Marathon Oil Corp., Cimarex Energy and Gulfport Corp. have pledged to use the line and are the four foundational shippers on
the project.
Planning for the project extends back years and is tied to Cheniere’s ongoing plans to boost its export abilities from its two Gulf Coast terminals.
Cheniere exports about 3 billion cubic feet of natural gas as LNG daily, and expects that level to continue to climb as it opens the Corpus Christi terminal. Cheniere’s work on the Midship project started in November 2016 when the company conducted open houses in communities along the route and also began having discussions with county commissioners and other area community leaders, including those representing Native American tribes.
Cheniere’s Midship Pipeline Co. also has been created, and has hired another firm, TRC Companies Inc., to work on the Midship project.
TRC will perform engineering, mapping, civil surveying, environmental and right of way services for the main, 36-inch line.
It and a subcontractor also will build the mainline compressor stations, two lateral pipelines, a booster station and associated facilities.