Page 11 - NorthAmOil Week 29

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

FERC approves Williams’ Leidy South pipeline

PENNSYLVANIA GAS infrastructure company Williams winter. The project has been estimated to cost
announced on July 17 that it had received $531mn.
approval from the US Federal Energy Regulatory Williams has been keen to promote the role
Commission (FERC) to proceed with its Leidy natural gas can play in the energy transition, and
South pipeline expansion project. particularly in the shift away from coal-fired
The project envisages expanding Williams’ power generation.
existing pipeline infrastructure in Pennsylvania “As the United States switches to clean power
by around 582,400 dekatherms (16mn cubic to energise our electric grids, Williams is excited
metres) per day. It aims to connect gas sup- and proud to be the backbone that connects the
plies produced by Cabot Oil & Gas and Seneca best supplies of dry gas with our country’s largest
Resources in the state’s portion of the Marcel- demand centres,” Williams’ president and CEO,
lus and Utica shale plays with demand markets Alan Armstrong, stated. “This project represents
along the Atlantic Seaboard by the 2021-22 win- one of many opportunities to further reduce
ter heating season. greenhouse gas [GHG] emissions with right
Leidy South will use the company’s existing here, right now available solutions as coal-fired
Transco transmission corridor, which Williams electric generation plants are replaced with natu-
said “substantially” reduces the amount of new ral gas units to reliably balance the intermittency
infrastructure and land required for the project. of new renewable resources. In fact, there remain
Two new compressor stations need to be built as more than 80 coal plants in the states Transco
part of the project, and two existing compressor serves that can potentially be displaced by clean,
facilities also require upgrades. Some pipe will efficient and affordable natural gas.”
also need to be replaced. Transco is the US’ largest interstate natural
On its website Williams said construction is gas pipeline system by volume. The network’s
anticipated to begin in early 2021, with start-up mainline extends nearly 1,800 miles (2,897 km)
targeted for December of that year, in time for between South Texas and New York City.™
PERFORMANCE

Pace of US LNG cargo cancellations slows

US LNG buyers are continuing to cancel cargoes
of the super-chilled fuel that are scheduled for
loading from the US, but the pace of these can-
cellations is reported to be slowing. This comes
as demand remains depressed as a result of the
coronavirus (COVID-19) pandemic, while the
market also struggles with oversupply.
The nature of US contracts means that it is
generally cheaper for buyers to cancel a cargo
from the US, while still paying a tolling fee to the
LNG producer. And while LNG exporters and
their customers do not typically publicise their
commercial arrangements as far as individual
cargoes go, media regularly report estimates where storage tanks are full after the region
from their market sources. In line with this, Reu- became a leading destination for excess gas
ters reported three different estimates for cancel- on the market earlier this year. But the sources
lations of cargoes scheduled for September from added that fewer cargoes might be cancelled in
eight industry sources on July 21. September because traders could be betting on
The news service said one source estimated prices rising by November and December, with
15-20 cargoes for September had been cancelled, some tankers already holding cargoes at sea for
while another agreed it was less than 20. Two of sale later in the year.
Reuters’ sources estimated the number of cancel- Such sales would be expected to target Asia.
lations at up to 25-26 and some suggested that it The sources warned, however, that it was not yet
could be more than 26. However, even the upper clear that Asian demand would rise significantly
end of these estimates is lower than the 40-45 this winter. Cold weather normally pushes up
cargoes thought to be cancelled for loading in demand, but there are concerns that next win-
each of July and August. ter could be milder than usual again, and the
Two of the sources attributed the September impact of coronavirus (COVID-19) in the com-
cancellations primarily to low prices in Europe, ing months remains uncertain.™

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