Permian midstream development activity has been happening at a rapid pace over the past few years, and we’ve featured many of those projects in the RBN blogosphere. One of the most aggressive players has been Salt Creek Midstream, which is in the midst of a big Permian buildout focusing on natural gas, crude oil, natural gas liquids and even produced water. Salt Creek isn’t only developing local midstream infrastructure; it’s also at work on long-haul solutions that will enable Permian producers to access markets along the Texas Gulf Coast — a wellhead-to-water strategy, you might call it. Helping Permian producers meet their needs to take away all three hydrocarbons plus produced water with integrated transport and pricing options is the key to Salt Creek’s effort. Today, we dive into the details of the company’s expansive Permian infrastructure development plan.
Salt Creek Midstream (SCM) is a joint venture formed by Ares Management and ARM Energy in mid-2017. Following an initial capital commitment from Ares, SCM soon became a minority partner in EPIC Midstream’s NGL Pipeline from the Permian to the Corpus Christi area (see Flick of the Switch for more on that pipe). Later in 2017, SCM contracted capacity on Kinder Morgan’s El Paso Natural Gas Pipeline (EPNG) Line 1600, which allowed the company to move gas volumes from the Permian’s Delaware Basin to western markets and the Waha Hub (see It Was Good Living With You, (W)aha for more on this important Permian gas hub). Also in late 2017, SCM made another investment in capacity, this time taking out a significant tranche of long-haul transport space on the EPIC Crude Pipeline (again, see Flick of the Switch). Further, the company had been signing producers to acreage commitments for gas gathering; it finished 2017 with five producers and over 175,000 acres dedicated to future SCM gathering and processing projects. After that auspicious start, Salt Creek has picked up the pace of commercial activity over the last 18 months, and now has more than 900,000 acres dedicated across its natural gas, crude oil and produced-water systems. Next, we break down the components of this massive buildout and Salt Creek’s strategy.
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Natural Gas
Salt Creek has built out gas gathering systems (red lines in Figure 1) in Eddy and Lea counties in New Mexico, and Culberson, Reeves, Winkler, Ward and Pecos counties on the Texas side. The 325-mile network, about half of which is already in service, has pipe ranging from 8 to 30 inches in diameter and the capacity to transport up to 1.2 Bcf/d of rich gas to Salt Creek’s cryogenic processing plants, located near Pecos, TX, in Reeves County. There, the 200-MMcf/d Pecos I plant is currently in service; it will be joined in a few weeks by an additional cryogenic processing plant: the 200-MMcf/d Pecos II. Salt Creek is prepared to make a final investment decision (FID) on a third processing plant in the near term and has adequate site space to accommodate a total of up to 1.2 Bcf/d of cryogenic processing capacity.
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About the song
"Happy Together" was written by Gary Bonner and Alan Gordon and is the sixth cut on side one of The Turtles’ third studio album of the same name. It was released as a single in February 1967, where it knocked The Beatles’ Penny Lane out of the #1 on the U.S. Billboard Hot 100 chart. Turtles bassist Chip Douglas did the arrangement on the song, with Joe Wissert handling the production chores. It remains the biggest hit record for the band to date. Personnel on the recording were: Howard Kaylan (lead vocals), Mark Volman (vocals), Al Nichol (lead guitar, piano, backing vocal), Jim Tucker (rhythm guitar, backing vocal), Chip Douglass (bass, backing vocal, arrangement), John Barbata (drums, percussion), and Andy Cahan (organ). The single was certified Gold by the Recording Industry Association of America (RIAA).
The Happy Together LP was released in April 1967. It was produced by Joe Wissert and Bones Howe. It went to #25 on the Billboard Top 200 Albums chart, and was certified Gold by the RIAA.
The Turtles are an American rock band formed in Westchester, CA. Led by vocalists Howard Kaylan and Mark Volman, the group started as a surf rock band called The Crossfires in 1965, and changed their name to The Turtles after signing with White Whale Records in Los Angeles. Kaylan and Volman later joined Frank Zappa's Mothers (formerly the Mothers of Invention) and also released records of their own as Flo & Eddie. The pair became the go-to guys for background vocals on over 100 albums; T. Rex's hit record Bang A Gong is one of the best-known ones. The Turtles released eight studio albums under that band name and one under the name The Crossfires. Kaylan and Volman still appear together as The Turtles on the Happy Together Tour, which features various artists from the 1960s. Happy Together Tour 2019 is currently in progress and runs through August of this year.
