The Center Square: Texas natural gas industry, Port of Corpus Christi leading in LNG production, exports

Tue, September 27, 2022

Republished from the Center Square

The Texas natural gas industry and the Port of Corpus Christi continue to lead in U.S. energy production, infrastructure development and exports, as the port recorded the highest tonnage and revenue records in history largely due to increased Texas-based crude and liquefied natural gas production and exports.

Ed Longanecker, president of Texas Independent Producers & Royalty Owners Association, told The Center Square, “As the largest producer of oil and natural gas in the United States, and home to the country’s leading LNG [liquified natural gas] exporter and a robust network of ports, Texas is uniquely positioned to supply the energy needed to meet growing global demand.

“Energy security has never been more critical, and our policy decisions must reflect the need for regulatory certainty to support long-term investments in production and energy infrastructure.”

Texas is the leading producer of LNG in the U.S., producing roughly a quarter of America’s natural gas, which is also a low carbon fuel source. The U.S. became the world’s largest LNG exporter in the first half of 2022, the U.S. Energy Information Agency reports, led by Texas.

Natural gas has accounted for almost one-third of total global energy demand and growth over the last decade, surpassing all other fuels, TIPRO says. Demand for U.S. LNG increased after President Joe Biden pledged additional shipments to allies overseas as the ongoing war between Russia and Ukraine contributes to offsetting Europe’s energy supply.

“Since the end of last year, countries in Europe have increasingly imported more LNG to compensate for lower pipeline imports from Russia and to fill historically low natural gas storage inventories,” EIA explains.

While exports are also increasing from LNG facilities in the Louisiana Gulf, the industry in Texas continues to expand its infrastructure and production output. Last year, completion of a pipeline in the Permian Basin added an additional 2.1 billion cubic feet per day to Texas’ capacity.

Houston-based Cheniere Energy and Whistler Pipeline also announced a joint venture to construct the ADCC Pipeline. The 42-inch intrastate pipeline is expected to extend 43 miles from Agua Dulce in south Texas to the Corpus Christi LNG terminal. The 724 km-long mainline originating near Coyanosa, Texas, in the Permian Basin, terminates near Agua Dulce. Once operational, the 43-mile extension is expected to transport up to 1.7 billion cubic feet per day of natural gas, according to a company announcement.

Cheniere’s Texas facility plans to add more than 10 million metric tons per year of capacity, TIPRO says, combined with additional pipeline infrastructure will help solidify Texas’ dominance, strengthen energy independence and handle increased production in the Permian Basin.

Texas will also be shipping larger amounts of lower-carbon LNG worldwide, according to a Texans for Natural Gas report. The LNG leaving the Port of Corpus Christi emits 50% less CO2 than coal when used for power generation in countries like China, India and Germany, the report found. It also boasts a 143% lower flaring intensity than Russia’s, which has historically provided the bulk of supply to European countries.

The Port of Corpus Christi, known as The Energy Port of the Americas, is the top U.S. port in total revenue tonnage. It was the first U.S. port to export crude oil on Dec. 31, 2015. It was also the first port in Texas to export LNG loading cargo from Cheniere Energy’s Corpus Christi Liquefaction facility. In February 2016, Cheniere was the first company in America to export LNG.

In the second quarter of 2022, the Port of Corpus Christi achieved its best quarter and best half-year tonnage in its 100-year history, moving a record 46.4 million tons in the second quarter and 90.1 million tons in the first six months of 2022.

“The Port of Corpus Christi continues to set new high-water marks in performance as a result of our customers’ successes and the continued development of supporting transportation and energy infrastructure by the Port Authority,” Port of Corpus Christi CEO Sean Strawbridge said. “As the Corpus Christi Ship Channel Improvement Project moves closer to completion (expected in 2023), the Port of Corpus Christi will have the deepest and widest ship channel in the entire U.S. Gulf Coast. This improved infrastructure will further reduce transportation costs for our customers and meet the increasing demand for energy across the globe.”