Kingfisher Midstream (KFM) is expanding its natural gas gathering/processing and crude oil gathering systems in Oklahoma's Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties (the STACK play). The move comes as producer activity is increasing, KFM said.
The system is expanding from its original footprint in Kingfisher County into Blaine and Major counties. KFM has also secured incremental residue gas takeaway capacity to markets outside Oklahoma. In recent months, increased drilling activity in the STACK and South Central Oklahoma Oil Province (SCOOP) regions has caused residue gas takeaway markets to tighten significantly, the company said.
KFM is now backed by long-term acreage commitments from six STACK producers. Beginning in the second quarter, the project is expected to have 260 MMcf/d of processing capacity at the Lincoln Plant site, all of which is matched by firm residue gas transportation to downstream markets, the company said.
KFM includes a natural gas gathering and processing system as well as a crude gathering system. Construction on the system began in September 2015 and commercial operations started last June. Since then, KFM said it has focused on serving producers in new and developing parts of the STACK play and continuing to secure firm residue markets.
The western expansion would add an additional 50 miles of high- and low-pressure gathering pipeline to the existing system, which includes more than 250 miles of high- and low-pressure gas pipeline, more than 100 miles of crude gathering, six crude oil truck-loading stations, a 50,000 bbl crude storage facility and condensate stabilization systems, making it the largest private midstream operator in the STACK, according to KFM.
Asset Risk Management unit ARM Energy and HPS Investment Partners LLC own KFM.
"ARM's and HPS' vision for the project continues to develop as more and more producers connect to the system and seek a first-rate gathering and processing system," said ARM CEO Zach Lee. "The residue capacity secured by KFM ensures that our producers will be well positioned to grow their production as STACK development continues."
In recent days, the STACK has seen an uptick in midstream dealmaking, by Alberta Investment Management Corp. and EnLink Midstream Partners LP; and NGL Energy Partners LP, for instance.