SynMax Research: Evidence now suggests that natural gas is flowing on the newly constructed NG3 pipeline in Haynesville, Louisiana. This development has led to a significant drop in Haynesville interstate production pipeline flows over the last two days, with volumes decreasing by as much as 0.5 Bcf/d.
NG3 is designed to move gas from northern Louisiana producing areas south to the Gillis hub. We believe it is highly likely the "Beauregard" interconnect on the TC Louisiana Intrastate Pipeline (TLIP) serves as NG3's primary outlet at the Gillis hub. This is supported by the fact that flows at this interconnection point have been increasing in recent days.
Vulcan Platform Analysis on NG3
Our Vulcan platform is now being leveraged to monitor pipeline expansion projects. By monitoring the status of the Gillis Treating Facility, we can provide valuable, on-the-ground intelligence. Our imagery from August 27th shows significant change at the facility, and subsequent images show little to no change, which supports the conclusion that the NG3 pipeline is now operational.
Reduced Interstate Production Flow Points
The rising flows on NG3 appear to be directly offsetting volumes on existing interstate production points. Our analysis has identified two specific locations that have likely seen reduced volumes as a result of NG3’s completion:
SpringRidge
Shippers at the SpringRidge location include marketing arms of producers and third-party marketers. The largest shipper at this location is Expand Energy, which has moved over 50 MMcf/d through SpringRidge. Expand Energy is also the main shipper on the new NG3 pipeline, making it highly probable that the company is now diverting volumes from SpringRidge to NG3. This would account for the artificial drop in Haynesville interstate production flows. This trend is evident as Haynesville interstate production flows fell in early September, coinciding with the ramp-up of both the NG3 pipeline and the Louisiana Energy Gateway (LEG) pipeline. A map illustrates the locations of SpringRidge (which accounts for most of the Haynesville interstate production flow drop on the ETC Tiger Pipeline), Beauregard (the NG3 interconnect point with the Louisiana Intrastate Pipeline), and the LEG pipeline.
Magnolia Gas - Keatchie
A similar dynamic is playing out at the Magnolia Gas – Keatchie production receipt point in Keatchie, De Soto Parish, Louisiana, which also likely connects to gathering systems serving Expand Energy wells. This point shows a sharp inverse relationship with the outgoing NG3 flows at Gillis Hub and likely represents a significant portion of the transfer of gas from interstate points to the intrastate NG3 pipeline.
Update to the Daily Production Model
As a result of this analysis we are updating our daily natural gas production model for the sub region Haynesville - LA to better account for the changed interstate pipeline sample. This change will increase our modeled production by 0.30 bcf/d beginning 9/1 with smaller increases starting 8/28. A chart detailing the change is below.
New information is constantly becoming available and our goal is to give our customers the best possible production intelligence. We are closely watching for additional indicators of Haynesville - LA production and will keep you informed as we learn more.