Atlas Pipeline to expand natural gas processing capacity in west Texas
Atlas Pipeline announced plans to construct a new 200 million cubic feet/day (MMCFD) cryogenic processing plant to accommodate rapidly increasing Permian production in Texas.
The new facility, to be known as the Driver plant, will be constructed in two phases, with the first phase involving construction of plant and associated compression to process 100 MMCFD, expected to be in service in the first quarter of 2013, the company said.
The second phase, involving placement of additional compression and refrigeration equipment to increase the plant’s capacity to 200 MMCFD, is scheduled to be operational in the first quarter of 2015.
Atlas said it expects cash flows from the expansion to materialize in meaningful amounts during the second half of 2013.
Completion of both phases will increase processing capacity in west Texas from 255 MMCFD to 455 MMCFD. The total expected cost is estimated to be $200 million, which includes both phases of the expansion and the all of expected compression and well connection costs.
While a minor portion of the $200 million in capital spending will be well connections beyond the 2015 calendar year, the majority of the capital outlay for the project will be incurred evenly over the 2012-2015 period.
Approximately $80-85 million is expected to be deployed over the 2012-2013 time period, the company said.
Pioneer Natural Resources, which partners with Atlas on the WestTX system and owns a 27.2% interest in the facility - will participate in the projects costs and cash flows and will anchor the production growth behind the expansion.
“We are excited to announce a significant 200 million cubic feet per day expansion at our West Texas facility,” said Eugene N. Dubay, Atlas CEO.
“This expansion, the second announced expansion of this facility this year, is the result of increased activity in the Permian basin by our producer customers, including Pioneer, who is a partner on the system.”
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