Northwind’s Sour Expansion Adds Room for Delaware Development

Midstream development typically follows E&Ps.

But in the southeastern corner of New Mexico, the usual process has become more mixed.

Northwind Midstream announced in March that the company has expanded and will continue to expand its sour gas treatment facilities in Lea County, a move that will prove critical to further exploitation of the Delaware Basin, particularly the Avalon Shale, said CEO Matt Spicer.

“The demand that we are seeing is going to triple to quadruple sour gas in Lea County, maybe even southern Lee County, probably in the next three to five years,”

Sour gas contains large amounts of hydrogen sulfide, which is fatal if inhaled, and CO₂. Producers usually treat the sour gas associated with crude production by “sweetening” the mixture with a scavenger chemical that converts the hydrogen sulfide into something harmless.

High concentrations, however, can become too expensive or difficult to treat, limiting development.

“The producers, except for some test wells here and there, did not really want to drill into the very, very sour gas wells, the Avalon specifically, because there wasn’t the infrastructure to support it,” Spicer said.

After chemical manipulation, the next and more capital-intensive option is to create central amine treatment facilities that remove the hydrogen sulfide and CO₂ to create a sweet stream of gas that can undergo normal processing. The sour gases are then disposed of through injection wells.

Northwind, backed by Five Point Energy, was established in 2022 to build a sour gas treatment plant. The Titan Treating Facility sits in southern Lea County, close to the Texas border.

The plant can currently handle 150 MMcf/d of sour gas and will add another 50 MMcf/d by the summer, completing Northwind’s phase 1 of development. In mid-March, the company announced it had reached a final investment decision for phase 2, which will expand treatment capacity to 400 MMcf/d by 2026.

The company uses Class 2 acid-gas injection wells in the Devonian to permanently store the sour gas. Spicer said finding the appropriate spot for the storage wells was key.

“It’s very difficult to find a spot that you're not interfering with oil and gas production or maybe saltwater disposals in the area, so that spot was picked specifically for our acid gas injection operations,” he said.

The company expects further development in Lea County and other areas nearby. Spicer pointed out that, while amine treatment adds a cost, the area’s wells also produce less water than some other spots in the Delaware. Produced water brings extra costs of its own.

Northwind therefore sees the area it serves becoming more productive. The original Tier 1 plays have matured, he said, and producers are looking more into what had been considered lower tier areas.

“We have a lot to say grace over here: a lot of money to spend, a lot of producers that are wanting more and more and more space,” Spicer said. “We think in the next year to 18 months the focus is going to be Lea County, New Mexico, and trying to try to solve that problem for our producers.”