Santa Fe Midstream LLC is constructing midstream facilities in the Permian Basin's San Andres Play due to increased activity by producers in the area, the Plano, Texas-based company said Sept. 9.
Construction commenced in August on a natural gas gathering, treating and processing system and the initial natural gas facilities will be operational by second-quarter 2018.
Santa Fe is also developing a crude oil gathering system in the area, according to the company press release.
Amer Rathore, Santa Fe's managing partner and founder, said San Andres producers have expressed "significant interest” in new crude oil and natural gas gathering infrastructure due to increased activity and rapid growth.
The facilities will be located in Yoakum, Gaines and Cochran counties in West Texas as well as Lea County, N.M. Both will initially serve a “substantial dedication from a leading producer sponsored by a large energy private equity fund,” the release said.
“By connecting to multiple crude oil markets as well as premium natural gas and liquids markets, Santa Fe will provide the best possible netbacks for producers in the area,” Greg Kegin, Santa Fe's managing partner and CEO, said in a statement. “We look forward to supporting producers’ drilling plans by expanding our system.”
Residue from the natural gas processing plant and treating facilities located near Denver City, Texas, will be delivered to El Paso Natural Gas Co. LLC’s interstate pipeline with access to the Waha Hub and Western U.S. natural gas markets. NGL will be delivered to Enterprise Products Partners LP’s (NYSE: EPD) Chaparral Pipeline for transportation to Mont Belvieu, Texas.