Pipeline companies have been suing energy giant Energy Transfer LP in Louisiana courts, accusing Energy Transfer of anti-competitive actions by blocking proposed north-south pipelines from crossing an Energy Transfer conduit running through northern Louisiana.
At stake in the litigation is how the Haynesville Shale formation in northwestern Louisiana will be developed. The formation is a section of sedimentary rock more than 10,000 feet below the surface of the Earth in an area including parts of Texas and Arkansas, according to the Louisiana Department of Natural Resources.
“Several energy companies have begun work in the area to explore the shale formation and drill for natural gas based on findings indicating a potentially large supply of gas trapped within some portions of the shale,” the department’s website states.
Pipeline companies have been working to provide conduits from the Haynesville to transport natural gas to the Gulf Coast region, where liquefied natural gas (LNG) facilities are expanding to serve lucrative foreign markets, including Europe.
New Generation Gas Gathering LLC (NG3), an affiliate of the Momentum Midstream pipeline company, is now suing Energy Transfer in a Louisiana district court, alleging that Energy Transfer’s refusal to allow the new NG3 project to cross Energy Transfer’s Gulf Run pipeline system is delaying a $1.6 billion energy development.
“If Energy Transfer were able to block competitors and expand Gulf Run, it would control 80% of the market and cause a shortage of natural gas supply for the Gulf Coast,” NGI Natural Gas Intelligence reported.
In a similar case, the energy company DT Midstream lost its legal bid in the 42nd Judicial District Court in Louisiana to gain permission to tunnel under an Energy Transfer pipeline. Energy Transfer prevailed in that lawsuit, with the court finding that the defendant company had an exclusive right to the property in question. The case is currently being appealed.
The Louisiana Oil and Gas Association said that north-south pipeline projects in that part of Louisiana are important to take advantage of the developing LNG market.
“Transportation via pipelines of Haynesville Shale natural gas is critically important for our industry, state and nation,” LOGA President Mike Moncla said in an email to the Louisiana Record. “... Pipeline crossings, in the oil and gas industry, and in a whole host of other important industries, are inherently necessary and occur routinely and safely throughout this state and across the county.”
Potential delays in the transmission of such a vital natural resource would represent a disservice to both Louisiana and the nation, Moncla said.
“The detriment of allowing one pipeline owner – in this case one owning an east/west pipeline across a large part of the northern portion of this state – to have the ability to wall off and prevent other pipelines from crossing cannot be overstated, in this instance and in its potential future application,” he said. “This is why LOGA submitted an amicus brief in support of crossings in the current (DT Midstream) case on appeal and will monitor other similar litigation involving attempts to block crossings.”
Jeff Landry, Louisiana’s new governor, said in a court brief last year that the 42nd Judicial District Court erred in its decision and the meaning of “exclusive” in Energy Transfer’s servitude agreements with landholders in northern Louisiana, according to the Argus business information website.