Amarillo Midstream and Rattler Midstream LP have formed Amarillo Rattler, a 50/50 joint venture that will own, operate and expand a natural gas gathering and processing system in the Permian Basin’s Midland sub-basin in West Texas, the companies announced Thursday.
Amarillo Midstream is owned by ArcLight Capital Partners, an infrastructure firm focused on North America that has invested $22 billion in more than 100 transactions since its inception.
Rattler Midstream is a limited partnership formed in July 2018 by Permian independent Diamondback Energy Inc. to own, operate and acquire midstream infrastructure assets in the Midland and Delaware sub-basins.
The JV, which currently owns and operates the Yellow Rose gas gathering and processing system spanning Dawson, Martin and Andrews Counties in Texas, plans to build and operate a new 60 MMcf/d natural gas cryogenic processing plant in Martin County, as well as incremental gas gathering and regional transportation pipelines.
The existing Yellow Rose system has a total processing capacity of about 40 MMcf/d and over 84 miles of gathering and regional transportation pipelines.
Amarillo Rattler said it expects the new processing plant to enter full commercial service in mid-2021.
Diamondback has contracted for a portion of the new processing plant’s capacity, which the firms said “is well-positioned for future expansion, pursuant to a gas gathering and processing agreement entered into with the joint venture in exchange for Diamondback’s dedication of certain leasehold interests to that agreement.”
“Capturing and efficiently processing natural gas in the Permian Basin is a key part of the U.S. energy transition and we look forward to supporting Diamondback in these efforts,” said ArcLight’s Dan Revers, managing partner.
Diamondback CEO Travis Stice added, “Enhanced planning and coordination between our gas gathering and processing partners in this venture, and across all of our operations, increases the capital efficiency and reliability of the integrated systems and minimizes increasingly undesirable outcomes such as flaring.”
In Diamondback’s fourth quarter 2019 earnings call, Stice said that the upstream and midstream segments must work together to eliminate routine flaring in the Permian as quickly as possible.
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