Midcoast Energy proposes new natural gas pipeline to serve US Gulf Coast

Houston — Private equity backed Midcoast Energy began soliciting shippers Monday for a new natural gas pipeline that will boost its ability to move supplies to the Houston Ship Channel and US Gulf Coast markets.

The midstream operator, which was sold by Canada's Enbridge to ArcLight Capital Partners in May, said it has been seeing substantial volume growth with increased gas production from drillers in East Texas and Louisiana's Haynesville shale.
Midcoast operates a large network of gathering, processing and pipeline assets that comprise its East Texas system. The new CJ Express pipeline, which is expected to start up in mid-2020, will consist of up to 150 miles of 36-inch or larger diameter pipeline, commencing near Carthage in Panola County, Texas and extending south to Midcoast's Clarity Pipeline in Hardin County, Texas. It will interconnect with several existing pipelines operated by Kinder Morgan, Williams and other companies.

The shipper solicitiation and a statement from Midcoast did not specify CJ Express' total expected capacity. The non-binding open season that began Monday lasts until September 14. Under Enbridge's fold, Midcoast conducted the company's US natural gas and natural gas liquids gathering, processing, transportation and marketing operations, serving established basins in Texas, Oklahoma and Louisiana.

At the time it was sold to an affiliate of ArcLight for $1.1 billion, the Midcoast business included approximately 11,200 miles of natural gas gathering and transportation pipelines, 2 Bcf/d of natural gas processing capacity, an NGL logistics and marketing business, and a 35% interest in Texas Express Pipeline.

In its solicitation for the new pipeline, Midcoast said its network's connectivity in the region will help serve a demand pull being driven by growing downstream and end-user markets on the Texas and Louisiana Gulf Coast, as well as in Mexico, which is heavily reliant on US supplies of gas.


Source: S&P Global