Tellurian Launches Binding Open Season on PGAP

US LNG developer Tellurian launched a binding open season for the Permian Global Access Pipeline (PGAP) project on April 8.

The proposed pipeline will form part of Tellurian’s planned network to link its shale gas acreage in the Permian Basin in Texas to the planned Driftwood LNG export facility in Lake Charles, Louisiana. The open season will run to May 24.

PGAP will have the capacity to transport at least two billion cubic feet of natural gas a day. Construction could begin as early as 2021 and the pipeline is targeted to be in service as early as 2023. Investment costs are estimated at $3.7bn.

Tellurian’s full proposed pipeline network is anticipated to cost $7.3bn overall. The investment is incremental to the $15.2bn that Tellurian plans for Driftwood LNG. The company is hoping to fund a significant chunk of the project via equity sales.

Tellurian said April 2 it had signed a heads of agreement (HOA) with French Total for a $500mn equity investment, as well as the purchase of around 20mn shares of Tellurian common stock for $200mn. Total will also purchase of 2.5mn mt/yr of LNG. A final investment decision on Driftwood LNG is anticipated in the first half of 2019.

“Permian producers have recently paid $9.00 per mmBtu to move their natural gas away from the wellhead, reflecting the acute need for infrastructure development in the basin,” said Tellurian CEO Meg Gentle. “By contrast, Southwest Louisiana is a market expected to grow 300% in the next five years. The Permian Global Access Pipeline is critical infrastructure that will interconnect stranded Permian gas production with growing markets, reduce flaring, and provide a valuable cleaner fuel to reduce urban pollution and carbon globally.”