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Permian Midstream Player Expanding Again

Nuevo Midstream LLC is beefing up its gas processing and treating capacity in the Delaware Basin near Orla, TX, targeting service to producers that are pursuing the liquids-rich Bone Spring, Wolfcamp and Avalon Shale plays, the company said Wednesday.

Nuevo plans to "significantly increase" capacity at its Ramsey plant. It has bought a cryogenic processing plant with capacity of 100 MMcf/d and a second amine treating plant with a capacity of 475 gallons per minute (gpm). Both are to be installed at the Ramsey site and are expected to be operational in the second quarter.

The company's Ramsey Gathering System is also slated for extension with additional large-diameter gathering lines and an interconnect to the El Paso pipeline. The system crosses Eddy County in southeast New Mexico and Culberson, Loving and Reeves counties in West Texas and currently serves 38 Bone Spring, Wolfcamp and Avalon Shale producers, the company said.

The expansion is Nuevo's second in the Delaware Basin since the company was launched last April (see Shale Daily, April 18). "The Phase II expansion is supported by additional customer dedications of acreage and production volume in the Avalon Shale trend," it said. "When the expansion is complete, Nuevo Midstream will have 110 MMcf/d of processing capacity and 625 gpm of treating capacity at the Ramsey plant along with more than 180 miles of high- and low-pressure pipeline and residue connections to interstate and intrastate markets."

The recently completed Phase I expansion included the recommissioning of a 10 MMcf/d processing plant and fractionator and the installation of a 150 gpm amine treating facility at the Ramsey site, as well as the addition of 13 miles of eight-inch diameter pipeline to the Ramsey Gathering System with an interconnect to the Enterprise Products pipeline nine miles south of the Ramsey plant.

"Producer activity in the area is accelerating, and we will continue to expand our capacity and pipeline footprint to provide producers with strategic gathering, processing and treating services to enable them to move gas to multiple high-value markets," said Nuevo CEO Jay Lendrum. "We are in advanced discussions with a number of producers regarding additional acreage and production dedications. Based on the level of current and planned drilling activity in the area, it is very conceivable that by the time our Phase II expansion is operational, we will be in the advanced planning stages of a Phase III expansion. Our goal is to offer as much as 250 MMcf/d of total processing capacity through the Ramsey system."

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