Houston-based start-up Piñon Midstream LLC is only a few months old, but already the company is making its mark in Lea County. In a recent news release Piñon Midstream announced that construction is already underway on a “sour gas treating and carbon capture facility” in Lea County. The facility includes an associated pipeline infrastructure. The project is already proving positive for the county, its residents and oil and gas produces.
The new greenfield facility, named the Dark Horse Facility, is slated to be fully operational by July of this year. The plant will be able to treat 85 million cubic feet of sour gas per day to yield sweet gas, which will be delivered to third-party processing plants. Through the processing process at the Dark Horse plant, gas that was previously an unusable waste product will be turned into a marketable commodity.
Not only will gas output be increased but the environment will be impacted positively. Treating sour gas helps to prevent acid rain, reduces flaring and lowers greenhouse gas emissions.
Lea County is located in the northeastern Delaware Basin. The Delaware Basin spans southern New Mexico and West Texas and is a part of the larger Permian Basin. Many parts of this basin have heavy concentrations of gas with an extreme amount of hydrogen sulfide, which is referred to as sour gas within the industry.
Oil producers cannot deliver sour gas to processing plants; often they back away from exploration due to the problems involved with sour gas. According to the Piñon Midstream website: Operators have been forced “…to flare sour gas, shut-in wells, or delay drilling activity, eliminating an important resource development opportunity and revenue stream.”
Dealing with sour gas has always been problematic and costly for oil and gas producers, and Piñon Midstream wants to provide a solution to alleviate the problems inherent with sour gas. Piñon Midstream co-founder and president Steve Green said: “Our goal is to provide the most creative and cost-effective sour gas solution for the Delaware Basin.”
The independent exploration and production company, Ameredev II, LLC, is a major oil and gas producer in the area. The company’s operations are currently focused in the Delaware Basin, and Ameredev sees the Dark Horse Facility as critical to its continued and expanded growth in our local area. Ameredev’s Chief Operating Officer Floyd Hammond said: “The Piñon team is providing a mission-critical solution to sustain development of the northeastern portion of the Delaware Basin.”
The addition of the Dark Horse Facility will significantly enhance the economics for producers to develop oil and gas in gas in the area. “Our H2S and CO2 removal and sequestration solution allows producers to drill wells and produce gas from locations known to have extreme concentrations of sour gas. Piñon sweetens the gas and transports it by pipeline to multiple processing plants for processing and sale,” states the Piñon Midstream website.
The Dark Horse Facility is the first facility of its kind in Lea County and is helping to create jobs and enhance the local economy. The facility is also solving a major industry problem in the area by providing an environmentally responsible and economically positive solution to an issue that has long hindered oil and gas exploration and production in the northeastern Delaware Basin in general and in the local area in particular.
Strategically located in an unpopulated area close to the Texas border near Winkler and Loving counties, the facility offers “… a centralized amine treating facility, an 18,000-foot-deep acid gas sequestration well and 30,000 horsepower of full NACE field compression and is expandable to treat up to 400 million cubic feet of sour gas per day,” comments The Pipeline and Gas Journal on its website.
Piñon Midstream was founded in December of 2020 by Green and Justin Bennett and is partnering with Black Bay Energy Capital, a private equity firm that invests in the “North American oilfield service sector.” For some 75 years Black Bay’s focus has been to help their clients reduce costs and improve operations. Black Bay also considers ESG (Environmental, Social, and Governance) criteria when making investment decisions.
A spokesman for Piñon has indicated that the company has already purchased a second sour gas treating and carbon capture plant that is scheduled to be installed and operational by the fourth quarter of this year. The new facility will increase “… Piñon’s total sour gas treating capacity to approximately 170 Mmcf/d [170 million cubic feet per day].”
