Private equity-backed Brazos Midstream is planning to add 500 MMcf/d of cryogenic natural gas processing capacity and 175 miles of gas gathering pipelines in the Permian Basin’s Midland sub-basin by the end of next year, management said.
The projects include the 200 MMcf/d Sundance I processing facility in Martin County, TX, which is mechanically complete and slated to begin operations this October.
Brazos also is “in the final stages” of construction on 175 miles of 16-inch and 24-inch diameter high-pressure natural gas gathering pipeline and associated midstream infrastructure spanning the core of the Midland, the firm said. Once the first phase of construction is complete on that gathering line, Brazos would operate about 260 miles of gathering lines and 10 compressor stations in the Midland.
In addition, to “accommodate forecasted production growth,” the midstreamer announced plans for an additional 300 MMcf/d cryogenic gas processing facility expected to be operational in the second half of 2025.
Marketed natural gas production from the Permian region is expected to rise 8% year/year in 2024 to 24.8 Bcf/d, and another 4% in 2025 to 25.8 Bcf/d, according to the latest U.S. Energy Information Administration projections.
The surge in Permian gas output has contributed to weak prices at the Waha hub in West Texas. NGI’s Waha forward basis price for September delivery averaged negative $2.803/MMBtu on Tuesday (Aug. 20).
“These expansion projects are a testament to our continued commitment to build high-quality assets in the Permian Basin and provide the highest level of service for our producer customers,” said Brazos CEO Brad Iles. “The Permian Basin accounts for a quarter of all marketed natural gas production in the Lower 48 and, despite being discovered over a century ago, production is estimated to continue increasing for years to come.
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“Our asset base represents mission critical infrastructure that provides reliable capacity for existing Permian gas production that has been historically underserved.”
Fort Worth, TX-based Brazos markets itself as the largest privately held midstream platform in the Permian. Its assets include roughly 1,200 miles of high-pressure natural gas, natural gas liquids and crude oil gathering pipelines throughout the Midland and Delaware sub-basins, as well as 660 MMcf/d of total Permian-based processing capacity. Expansion projects underway are expected to expand the firm’s processing capacity to about 1 Bcf/d by 2025.
The newly announced gathering and processing system is owned by Brazos Midstream Holdings III LLC, “which is backed by equity commitments from Old Ironsides Energy, Encap Flatrock Midstream, Brazos management and other strategic investors,” Brazos management said. “In addition, Brazos announced that it has recently closed a new preferred equity investment with EOC Partners, Elda River Capital, and co-investors and has significantly upsized its existing revolving credit facility, led by BOK Financial.
“These partnerships allow Brazos the financial strength and flexibility to continue to aggressively grow its footprint.”
