gas gathering pipelines

The Permian’s Midland and Delaware basins have seen their share of midstream success stories the past few years — many of them privately backed efforts to gain a foothold and then expand into the big time. Navitas Midstream Partners (later sold to Enterprise Products Partners) comes to mind; so do Oryx Midstream and Brazos Midstream. Now comes Vaquero Midstream — vaquero, of course, being Spanish for cowboy — the scrappy developer of a gas gathering and processing network in the Delaware. As we discuss in today’s RBN blog, Vaquero recently announced plans to build a new high-pressure pipeline that will double the capacity of its gathering system and a new processing plant that will give it a total of 600 MMcf/d of processing capacity with a slew of interconnections to key gas and NGL takeaway pipelines. 

Increasing scale. Improving efficiency. Expanding into a fast-growing production area. These are only a few of the many reasons that midstream consolidation has remained an ongoing phenomenon in U.S. oil and gas basins — nowhere more so than in the Permian. The slew of acquisitions, mergers and joint ventures announced in the past couple of years is resulting not only in more concentrated ownership of midstream assets in West Texas and southeastern New Mexico, but in large, smooth-running systems for gathering, treating and processing hydrocarbons and transporting them to market. In other words, in magnificent molecule-moving machines. With today’s RBN blog, we begin a short series on the latest round of midstream M&A activity in the U.S.’s hottest production area.

The energy market dislocations of the COVID era have accelerated consolidation in the midstream sector as oil and gas gatherers — and gas processors — in the Permian and other basins seek greater scale, improved reliability, and the potential to direct more hydrocarbons through their takeaway pipelines. New evidence of this trend came just last week, when Enterprise Products Partners announced it has agreed to acquire privately held Navitas Midstream Partners, a fast-growing gas gatherer and processor in the Permian’s Midland Basin, for $3.25 billion. As we discuss in today’s RBN blog, the acquisition will give Enterprise its first gas gathering and processing assets in the heart of the Midland and may boost volumes on its residue-gas and NGL pipelines there.

Many U.S. hydrocarbon production basins have experienced major ups and downs the past few years — the Haynesville, Eagle Ford, Bakken, and SCOOP/STACK, to name just a few. The Permian hasn’t been entirely immune from bad times either — crude oil and associated gas production there plummeted in the early days of the COVID-19 pandemic last year and again during the Deep Freeze in February this year — but it would be fair to say that the play’s Midland Basin has been among the energy industry’s surest bets during the Shale Era, with strong, highly predictable gains in output that producers and midstreamers alike can pretty much bank on. As a result, a number of gas-and-NGL-focused midstream companies have been taking the long view in their planning for new gathering systems, gas processing plants, and connections to a multitude of takeaway pipelines. In today’s blog, we discuss one company’s development of a now-massive and flexible hub-and-spokes network in the heart of the Midland.