Pinnacle Midstream II LLC finalized the development of a natural gas processing complex set to extend the independent energy infrastructure company’s growing services franchise in the Midland Basin.
“This is an exciting milestone in the growth of Pinnacle’s infrastructure platform and will enable the company to extend its natural gas services franchise across one of the most active oil and gas producing regions in North America,” commented J. Greg Sargent, CEO at Pinnacle, in a release from the Houston-based company on July 21.
Construction of the facility in Midland County, Texas, which will have a total capacity of 200 MMcf/d upon completion and be equipped with an integrated nitrogen rejection unit, initiates Phase II development of the Dos Picos System, an existing high pressure, large diameter gathering and compression facility in the Midland Basin that commenced operations during the first quarter of 2021.
“Our continued investment in the Dos Picos asset will enable us to better service our customers and help them benefit from an improving commodities environment while continuing to maximize recoveries and limit flaring across the Basin,” Sargent added in his statement. “We expect the Phase II project to support economic development and create jobs in the Midland, Martin and Glasscock counties area.”
Backed by growth capital from management and Energy Spectrum Capital, Pinnacle Midstream is focused on providing natural gas services to producers throughout the Midland Basin area of the Permian. The company’s midstream infrastructure is anchored by long-term acreage dedications with top-tier, investment-grade Permian Basin operators currently continuing full-scale, multipad development.
Pinnacle Midstream said in its release that its Dos Picos facilities were designed to support high intensity pad development, which the company anticipates will accelerate throughout 2021 and beyond.
“With the increasing development of multiwell pads and higher production rates in the Midland Basin, we want to ensure our current and future customers will continue to receive reliable flow assurance as well as access to the best commercial markets,” added Drew Ward, chief commercial officer at Pinnacle, in the release. “This further emphasizes the opportunistic and critical importance of our strategically-located platform.”
The Dos Picos Plant in Midland County is targeted to begin commercial operations during second-quarter 2022.
Further, Pinnacle said it is also considering the development of a fully integrated solar facility adjacent to the Dos Picos Plant to supplement electrical power needs with renewable energy to reduce the carbon intensity of the system. The solar facility, according to Pinnacle, is a part of the company’s environmental stewardship initiative and would provide a low-impact solution to reduce direct greenhouse-gas emissions for Pinnacle plus indirect, or Scope 2, emissions for its growing customer base.
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