“Rapidly increasing” production in the Permian Basin in West Texas has launched plans by Atlas Pipeline Partners LP to construct a 200 MMcf/d cryogenic gas processing plant there.
The Driver Plant would be constructed in two phases with the first having capacity to handle 100 MMcf/d and expected to enter service in the first quarter of 2013. The second phase would add another 100 MMcf/d of capacity and would be operational in the first quarter of 2015.
Completion of both phases would increase capacity at the partnership’s WestTX facility from 255 MMcf/d to 455 MMcf/d. The entire project is expected to cost about $200 million, the partnership said.
Pioneer Natural Resources Inc., which owns a 27.2% interest in the WestTX facility, will participate in the project’s costs and cash flows and will anchor the production growth behind the expansion, Atlas Pipeline said.
“This expansion, the second announced expansion of this facility this year, is the result of increased activity in the Permian Basin by our producer customers, including Pioneer, who is a partner on the system,” said Atlas Pipeline CEO Eugene Dubay.
In the Midcontinent region of Oklahoma, southern Kansas, and northern and western Texas, Atlas Pipeline owns and operates five active gas processing plants as well as about 8,600 miles of active intrastate gas gathering pipeline.
Earlier this year Atlas Pipeline increased its capital budget to respond to significant growth of its Midcontinent midstream processing businesses (see Daily GPI, Nov. 3; May 16). Added to the capital spending plan for 2011 and 2012 was $400 million to pay for expansion of the Western Oklahoma (WestOK Chaney Dell) and Velma systems, for expenses for compression, gathering lines and connections that are expected to be incurred in 2012, and to restart the cryogenic skid at Midkiff in West Texas.
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