Page 12 - NorthAmOil Week 48 2020

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Tellurian pulls Permian pipeline application

TEXAS-LOUISIANA LNG developer Tellurian has asked US federal pipelines whose construction Tellurian previ-
energy regulators to withdraw its application to ously said it would defer. The company’s original
build the Permian Global Access gas pipeline, plan entailed four pipelines – Driftwood, Per-
which would connect to its proposed Driftwood mian Global Access, Haynesville Global Access
LNG terminal in Louisiana. and the Delhi Connector. However, it announced
The request was made in a December 1 filing in a presentation in August that it was deferring
with the US Federal Energy Regulatory Com- construction of the Permian Global Access and
mission (FERC), which came a day after Tellu- Haynesville Global Access pipelines. The com-
rian announced that its president and CEO, Meg pany did not mention the Delhi Connector in
Gentle, would leave the company. the presentation, but other details implied that its
Tellurian said in the filing that “current mar- new, scaled-back plan for the first phase of Drift-
ket conditions do not support the economic wood LNG only involved the 4 bcf (113.3 mcm)
thresholds to pursue the [Permian Global per day Driftwood pipeline, which has already
Access pipeline] further at this time”. It added, been approved.
however, that it “continues to believe that in Permian Global Access was estimated to cost
time the proposed project will provide signifi- around $4.2bn to build, compared with about
cant benefits”. The company said it would hold $2.3bn for Driftwood and roughly $1.4bn each
a new open season for the pipeline in the event for the Haynesville Global Access and Delhi
that market conditions rebound and it looks as Connector pipelines. Tellurian had initially esti-
though additional gas transportation capacity is mated that Phase 1 of Driftwood LNG would
needed. cost $27.5bn to build, but said in August that the
Permian Global Access would have had the pipeline deferrals and other optimisations would
capacity to carry up to 2bn cubic feet (56.6mn result in a cost reduction of roughly 30%.
cubic metres) per day of gas from the Permian Octávio Simões was appointed president and
Basin to the Louisiana Gulf Coast. CEO of Tellurian on November 30, replacing
The withdrawal is not altogether surprising Gentle. The reason for Gentle’s departure from
given that Permian Global Access is one of three the company has not been disclosed.™

INVESTMENT

Suncor raises spending,

production guidance for 2021

CANADA CANADA’S Suncor Energy has released its worth of debt in 2021, and that it would under-
capital expenditure and production guidance take a CAD500mn share repurchase programme
for 2021. Like fellow major Canadian producer over the 2021 fiscal year.
Imperial Oil, Suncor is cautiously planning to “The decisions we made this year give us the
raise capex and production next year, assuming ability to strengthen the balance sheet, increase
that benchmark US oil prices stay near their cur- shareholder returns, and invest in our business
rent levels of around $45 per barrel. to grow future free funds flow,” said Suncor’s
The company said it was targeting produc- president and CEO, Mark Little.
tion of 740,000-780,000 barrels of oil equivalent Analyst comments on the company’s guid-
per day (boepd) in 2021, and capex of CAD3.8- ance suggest that it is in line with what they were
4.5bn ($3.0-3.5bn). This would mark an increase expecting.
of around 9% on anticipated 2020 spending of “Suncor almost broke even in the third quarter
CAD3.6-4.0bn ($2.8-3.1bn). The majority of the of 2020, and now is getting ready to pay down a
company’s budget for next year – CAD2.9-3.4bn portion of the debt it took on to navigate the cri-
($2.3-2.6bn) – will be allocated to sustaining sis,” said a Credit Suisse analyst, Manav Gupta. He
capital, which it said includes in situ well pads. noted that Suncor had cut capital and operating
Suncor anticipates carrying out major main- spending earlier this year in response to the down-
tenance programmes next year at its oil sands turn, and had lowered its dividend payments.
upgrading operations, at the Syncrude Canada The fact that both Suncor and Imperial are
facilities that it is about to take operatorship of beginning to ramp up production and spending
and at its refineries. suggests a growing confidence that while the
The company also said it expected to repay market will remain challenging into 2021, con-
CAD500mn ($389mn) to CAD1bn ($777mn) ditions will also keep improving.™

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