ARM Energy Holdings LLC on Thursday announced a FID (final investment decision) to proceed with the Mustang Express Pipeline project, designed to add 2.5 billion cubic feet a day of natural gas transport capacity on the Texas Gulf Coast.
The pipeline system represents an investment of $2.3 billion, ARM Energy and Pacific Investment Management Co (PIMCO) said in a joint statement. “Mustang Express Pipeline will be constructed and operated by ARM Energy, along with its financial partners, PIMCO and associated co-investors”, they said.
Expected to be completed late 2028 or early 2029, the project will have a 178-mile mainline from the Katy Hub to Port Arthur. The conveyor, 42 inches in diameter, will total 236 miles in length, the companies said.
Mustang Express is supported by an anchor shipper commitment from Sempra Infrastructure for the provision of feed gas for its Port Arthur LNG Phase II project, the statement said.
Houston, Texas-based ARM Energy plans an open season this month for the project’s remaining capacity.
ARM Energy contracted Jindal Tubular USA for the mill capacity and Solar Turbines Inc for the turbines for the project’s three gas-driven compressor stations, which will have a total capacity of 300,000 horsepower, the statement said.
Mustang Express will “significantly enhance the efficiency of the U.S. natural gas supply chain”, ARM Energy chief executive Zach Lee said. “By linking two of the most prolific natural gas-producing regions in the U.S. directly to LNG export facilities in Texas, we are helping ensure a reliable supply of natural gas for liquefaction and export with a route that crosses four storage facilities – delivering positive impacts for global energy needs and Texas communities”.
PIMCO managing director and portfolio manager Adam Gubner said the project “reflects our commitment to invest in infrastructure to support LNG expansion in the U.S., while also providing compelling long-term investment opportunities for our clients looking for attractive risk-adjusted returns”.
Last month Sempra announced a positive FID on the project, which it said would double the current terminal’s liquefied natural gas capacity to 26 million metric tons per annum (MMtpa).
In May the U.S. Department of Energy (DOE) granted phase II a permit to export to countries without a free trade agreement (FTA) with the U.S., marking the resumption of federal permitting for LNG export to non-FTA nations following a pause by the previous administration.
Phase II is now authorized to export the equivalent of 698 billion cubic feet a year of natural gas, or about 13.5 MMtpa of LNG according to Sempra, to FTA and non-FTA countries on a non-additive basis until 2050. Sempra received the FTA portion of the permit July 2020.
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