E&Ps active in the San Juan Basin’s Mancos Shale think it has real potential, but acknowledge that regional natural gas prices would have to be higher to justify the investment. What Mancos producers need, they say, is better access to premium markets like Arizona and northwestern Mexico. A new pipeline might help.
A small cadre of E&Ps active in the San Juan Basin’s Mancos Shale is anticipating breakout growth in natural gas production there if and when gas prices rise, and a well-known midstreamer is planning what could eventually be a high-capacity gas pipeline to the burgeoning Arizona market.
The SunZia Wind Project, the largest wind farm in the U.S., began commercial operations this month. The wind farm, located in New Mexico, has a total net summer generating capacity of 3,650 megawatts (MW) and is composed of 916 wind turbines. Its capacity is more than three times larger than the next two largest wind farms, Alta Wind in Southern California (1,098 MW) and Great Prairie in northern Texas (1,027 MW).
Kinetik achieved full commercial in-service at its Kings Landing natural gas processing complex in late September, adding 220 MMcf/d of gas processing capacity in Eddy County, NM, the company said in its quarterly earnings call November 5.
While several larger midstream companies were focused on building conventional gas gathering and processing infrastructure in the Southern Delaware Basin, a handful of mostly smaller midstreamers were focusing on the Permian’s next challenge: developing systems in the Northern Delaware to gather and treat associated gas with high H2S and CO2 content. In today’s RBN blog, we continue our look at the region’s sour-gas-related assets with a review of what a few of these companies have assembled.
The midstreamers that built out and/or acquired the sour gas treatment facilities, acid gas injection wells and other assets E&Ps need to exploit the Northern Delaware Basin’s crude-oil-saturated rock are sittin’ pretty. Put simply, they anticipated what is now a race to “Drill, baby, drill!” in Lea County, NM, where the IP rates for crude are high but so are the H2S and CO2 content in the associated gas. In today’s RBN blog, we look at Targa’s, Enterprise’s and MPLX’s sour-gas-related assets.
The numbers out of Eddy and Lea counties in southeastern New Mexico are nothing short of staggering. Crude oil production at 2.3 MMb/d, or one-sixth of total U.S. output. Natural gas production north of 9 Bcf/d and rising fast. More than 90 active rigs — again, one-sixth of the U.S. total. Many top E&Ps are stoked about the Northern Delaware Basin because of its stacked benches of high-quality, crude-saturated shale and carbonate formations. But much of the associated gas emerging from wells in Lea County is “off-spec” — tainted by levels of hydrogen sulfide (H2S) and carbon dioxide (CO2) that need to be dealt with — and producers and midstreamers have been scrambling to develop the sour-gas-related infrastructure required to support production growth. In today’s RBN blog, we begin a detailed look at the Northern Delaware’s existing and planned infrastructure for handling sour gas, including special gas gathering systems, amine treatment facilities, acid gas injection (AGI) wells, sweet gas pipelines and processing plants.
The original Cactus Pipeline was a pioneer in moving large volumes of crude oil from the Permian and the Eagle Ford to the Corpus Christi area, which quickly became a leader in U.S. crude exports. Cactus II, an even longer and larger pipeline that came online in H2 2019, only added to Corpus Christi’s export prominence. But the competition with Permian-to-Houston pipelines is fiercer than ever and negotiated rates on pipelines to the Texas Gulf Coast are under pressure. In today’s RBN blog, we look at the Cactus I and Cactus II pipelines and their significance.
The build-out of the Permian’s midstream infrastructure over the past 10 years has created extraordinary opportunities for startup companies, most of them backed by private equity. Each of us could cite several examples of midstreamers that, with a combination of guile and grit, developed gathering systems, gas processing plants, pipelines and other infrastructure to serve the fast-growing needs of producers and shippers. In many cases, the assets they constructed were later sold — often at a hefty profit — to much larger firms. As we discuss in today’s RBN blog, even in the midst of sector consolidation, the entrepreneurial spirit of smaller Permian midstreamers continues.
The San Juan Basin in northwestern New Mexico and southwestern Colorado has seen more than its share of booms and busts in the last 100-plus years. During the Shale Era, natural gas production in the 7,500-square-mile basin has been slowly declining, undercut by competition from more prolific, better-situated wells in the Permian and Eagle Ford. But a small band of “San Juan believers” think the region is poised for yet another rebound, this time due to what they view as massive, untapped potential in the basin’s Mancos Shale. In today’s RBN blog, we discuss recent developments in the San Juan — and the basin’s extensive pipeline infrastructure.
