Glenfarne Group LLC subsidiary Texas LNG Brownsville LLC and Enbridge Inc. have executed a pipeline transportation precedent agreement on Jan. 18 for the expansion of the Valley Crossing Pipeline (VCP) to deliver approximately 720 million cubic feet per day of natural gas to Texas LNG’s export facility for a term of at least 20 years.

VCP consists of a 160-mile 42- and 48-inch diameter pipeline originating at Agua Dulce, a major Texas gas hub, and extending to the Port of Brownsville. A 10-mile lateral will be built to extend the pipeline to Texas LNG’s facility, along with the addition of compression facilities on the existing pipeline.

VCP’s pipeline header at Agua Dulce, a growing gas pricing and transportation hub in South Texas, interconnects with ten major gas pipeline systems providing access to abundant and competitively priced gas from the Permian and other major gas basins with a total receipt capacity of more than seven billion cubic feet per day. The compression facilities at Agua Dulce will use electric motors which can be powered by plentiful Texas renewable energy, thus reducing CO2 emissions.

“Enbridge is committed to the development and advancement of the Valley Crossing Pipeline as it serves Texas LNG and helps the facility meet global LNG demand,” Bill Yardley, Enbridge’s executive vice president and president–gas transmission and midstream, said. “We welcome the opportunity to expand our pipeline solutions in support of LNG efforts.”

Glenfarne is a developer, owner, and operator of energy transition infrastructure, and through its controlled subsidiaries, is the managing member and majority owner of Texas LNG. The company is currently developing a four million tonnes per annum (MTPA) LNG export terminal in the Port of Brownsville, South Texas.

“The execution of this agreement is the next of several important milestones Texas LNG will achieve as the facility moves toward a final investment decision,” Brendan Duval, Glenfarne’s founder and CEO, said. “Our agreement with Enbridge helps us accomplish our strategy of delivering LNG to our own gas-consuming projects around the world and to third party customers. We thank Enbridge for their partnership.”

The agreement is subject to routine conditions precedent and other industry standard provisions.

“Enbridge has been a tremendous supporter of Texas LNG from the project’s inception. We are pleased that we can leverage Enbridge’s leading natural gas pipeline expertise to safely transport responsible natural gas to our ‘green by design’ LNG facility,” Vivek Chandra, founder and CEO of Texas LNG LLC, said.

Texas LNG's other strengths include efficient modular construction design, transparent competitive pricing structure, and lower-carbon "green" LNG resulting from usage of more efficient electrical drive motors rather than gas-fired engines to drive the liquefaction compressors. The realistically sized four MTPA capacity of the facility fills an essential niche from LNG customers seeking smaller contracted volumes to diversify their gas supply portfolio. Texas LNG expects to achieve the final investment decision in 2022 and commercial operations in 2026.

White & Case acted as legal advisor for Texas LNG, and Vinson & Elkins represented Enbridge.