Houston-based Piñon Midstream LLC has placed into service some Permian Basin infrastructure in New Mexico that includes the Dark Horse sour natural gas treating and carbon capture facility, which is already near initial capacity of 85 MMcf/d.
The project within the Delaware sub-basin in Lea County was built to capture and permanently sequester carbon dioxide (CO2) and hydrogen sulfide (H2S) from natural gas volumes and then redeliver sweet gas to third-party midstream processors in the region.
Dark Horse “is open for business,” said Piñon President Steven Green. “The producers in our area have had a dire need for a long-term and environmentally friendly solution to the extreme acid gas concentrations that have previously challenged the region.
“By removing and sequestering these gases, the Dark Horse Facility makes it possible for operators to realize a single-source solution to CO2 and H2S contaminants that are prevalent throughout the basin.”
Piñon is near completion on installing a second amine treating plant that is expected to be completed this month. When operational, the second amine plant would nearly double treating capacity to 170 MMcf/d.
Plant 1 “is fully subscribed,” and a “portion of capacity” is subscribed for the second plant, said Chief Commercial Officer Justin Bennett.
The centralized amine treating facility includes a 18,000-foot-deep acid gas sequestration well, Independence AGI No. 1. It also has 40,000 hp of compression and 30 miles of high-pressure gathering and redelivery pipelines. The facility is expandable to treat up to 400 MMcf/d of sour gas.
The Independence AGI well is New Mexico’s deepest and largest acid gas injection well, with the capacity to annually sequester up to 175,000 tons of CO2 and 75,000 tons of H2S annually, management said.
“Sequestration capacity for the Dark Horse Facility will double when the Independence AGI No. 2 well is completed and placed into service,” now set for 2022.
Piñon in August also completed a senior secured credit facility with BOK Financial to fund expansion projects.
Vice President of Finance David Cargill said the credit facility, combined with an equity commitment from Black Bay Energy Capital, “provides ample liquidity to satisfy the growing demand for sour gas treatment and carbon capture solutions in the Delaware Basin.”
Piñon was formed in 2020 with financial backing from Black Bay. It also is supported by underwriting commitments from Ameredev II.
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