Texas LNG Brownsville LLC, one of two companies pursuing plans to build a liquefied natural gas export terminal at the Port of Brownsville, in January signed an agreement with Enbridge Inc. to deliver natural gas via an expansion of Enbridge’s existing Valley Crossing Pipeline.
Texas LNG, a subsidiary of New York- and Houston-based Glenfarne Group LLC, is planning a natural gas liquefaction/export facility capable of producing 4 million metric tons of LNG per year. The agreement with Enbridge, a multi-national pipeline company based in Calgary, Alberta, Canada, calls for delivery of approximately 720 million cubic feet of natural gas per day for a term of at least 20 years.
Texas LNG said it expects to make a final investment decision this year whether to proceed with construction of the project, which would be built on 625 acres at the port. The company began the pre-filing process with the Federal Energy Regulatory Commission in 2015. Following an environmental review, FERC in 2019 issued a final order authorizing construction and operations of the facility.
Texas LNG, which in December announced a lease agreement with the port for up to 50 years with the port, anticipates producing and exporting its first shipment of LNG in 2025 or 2026.
The Valley Crossing Pipeline is a 160-mile-long pipeline running from the major gas hub Agua Dulce in Nueces County to the port. Under the agreement, a 10-mile-long lateral line would be built to Texas LNG’s facility, with added compression facilities on the existing pipeline to keep the gas moving through it.
The $1.5 billion pipeline went into service three years ago supplying natural gas to Mexico via that country’s Sur de Texas-Tuxpan pipeline. The gas comes from the Permian Basin, located in West Texas and southeastern New Mexico, and other major gas basins.
Brendan Duval, Glenfarne founder and CEO, described the agreement as “the next of several important milestones Texas LNG will achieve as the facility moves toward a final investment decision.” He said the agreement with Enbridge would help his company’s strategy of delivering LNG to its own projects around the world that rely on natural gas and also to third-party customers.
Texas LNG said its final investment decision on whether to build is “contingent on many factors such as completing the required commercial agreements, securing all necessary permits and approvals, obtaining financing and incentives, and other factors associated with commercial viability of the investment.”
The Sierra Club released a statement last month regarding the Texas LNG-Enbridge agreement, calling it potentially a “major threat to the health and safety of communities in South Texas” that “will have devastating impacts on the local environment and global climate.”
NextDecade’s Rio Grande LNG, the other company planning an LNG export facility at the port, said last month that it was delaying its final investment decision until the second half of this year. The company had hoped to make a decision by the end of 2021. NextDecade was planning its own pipeline project, Rio Bravo Pipeline, to supply its port facility with natural gas, though NextDecade in 2020 agreed to sell its Rio Bravo Pipeline Company to Enbridge for no more than $25 million — contingent on a positive final investment decision on the part of NextDecade.
A third company that had proposed an LNG facility for the port, Annova LNG, part of Chicago-based Exelon Corporation, early last year abandoned its proposal as a result of “changes in the global LNG market,” according to the company.
