Permian natural gas pipeline on hold, market struggles amid COVID-19 | Current-Argus

A natural gas pipeline that would have connected producers in the Permian Basin with export and refinery markets in the Gulf Coast was halted as the fossil fuel industry struggles amid the COVID-19 pandemic.

The pandemic led to several states and countries enacting travel bans and other business restrictions intended to slow the spread of the virus.

This resulted in slumping oil and gas prices as consumers across the world used less fuel during the global health crisis.

The industry saw some minor recovery in recent weeks amid reports that a COVID-19 vaccine could be developed and publicly available by spring 2021, but the news wasn’t enough to drive prices near pre-pandemic levels. 

Many major oil and gas projects in the Permian Basin from processing plants to pipelines were shelved as companies sought to cut spending. 

Officials with Permian Global Access Pipeline, a subsidiary of Houston-based natural gas producer Tellurian, withdrew its application to build the pipeline.

Tellurian Inc. hopes the proposed Permian Global Access Pipeline will be transmitting 2-billion cubic-feet of natural gas per day from West Texas to the Lake Charles area by late 2023 or early 2024. CONTRIBUTED / TELLURIAN

The 625-mile line would have transported natural gas from Texas’ Waha Hub, where natural gas is sent from across the Permian Basin in West Texas and southeast New Mexico, to markets in southwest Louisiana.

It would have crossed 24 Texas counties and four parishes in Louisiana, moving up to 2.3 billion standard cubic feet of gas per day.

The Federal Energy Regulatory Commission (FERC) first approved the request to begin the application process in September 2019, but more than a year later as energy markets struggled to recovery from the pandemic, the application to FERC was withdrawn.

In a Dec. 1 letter to FERC, President of Permian Global Access Pipeline LLC (PGAP) Joey Mahmoud wrote that the present market conditions meant the project was not financially viable.

Adrian Hedden Carlsbad Current-Argus

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