Adrian Hedden
Carlsbad Current-Argus

A Permian Basin-based pipeline company sought to up its presence in the region by buying up almost a billion dollars in midstream assets in a merger announced last week.

Enterprise Products Partners said it was acquiring Pinon Midstream in an about $950 million deal, adding natural gas gathering and processing facilities to its portfolio in the eastern side of the Delaware Basin, a sub-basin of the Permian that straddles the New Mexico-Texas border.

The deal was expected to close by the end of 2024.

Pinon’s assets included in the sale were about 50 miles of natural gas pipelines both for gathering and re-delivery, along with five gas compression stations.

The assets also have a hydrogen sulfide and carbon dioxide treatment capacity of 270 million cubic feet per day (MMcf/d), and a planned expansion to 450 MMcf/d by the second half of 2025.

The sale also included two acid gas injection wells, and Enterprise is considering locations for a third, according to a company announcement, which will mean a total injection capacity of 750 MMcf/d.

The company estimated the area of the assets, mostly in Lea County in the Delaware Basin, had more than 7,500 remaining well locations but drilling was restricted due to a lack of gas treating capacity in the area.

Chief Executive Officer A.J. Teague said the acquisition would help Enterprise capitalize on this demand, and increase Enterprise’s presence in the booming Permian Basin.

“These assets accelerate our entry into this region by at least three or four years. These assets are highly complementary to our midstream energy system and provide us an excellent entry point into the eastern flank of the Delaware Basin for us to expand our natural gas processing footprint,” Teague said.

“Our entry will provide producers a choice for reliable and value-added processing services.”

Brazos adds pipelines on Texas side of Permian

Brazos Midstream based in Forth Worth, Texas said it completed multiple projects to build pipelines that would serve oil and gas operators throughout the Permian Basin.

The company completed a 200 MMcf/d cryogenic gas processing plant in Martin County, Texas, going into operations in October, and is finishing an about 175-mile natural gas gathering line and other associated infrastructure spanning the region.

Upon completion, Brazos will operate about 260 total miles of natural gas lines and 10 compressor stations in the Midland Basin, the eastern sub-basin of the Permian.

Brazos also planned to build another 300 MMcf/d processing facility in service by the second half of 2025, increasing the company’s capacity to 500 MMcf/d.

Brad Iles, Brazos CEO said the Permian Basin accounted for about a quarter of natural gas produced in the continental U.S., with production expected to grow in the coming years.

“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,” Iles said. “Our asset base represents mission critical infrastructure that provides reliable capacity for existing Permian gas production that has been historically underserved.”

Analysts predict continued growth in Permian

U.S. oil production was forecast to grow by 13.7 million barrels of oil per day (bopd) in 2025, according to the Energy Information Administration (EIA), while natural gas would grow to 114.3 billion cubic feet per day (cf/d).

The EIA said most of that growth centered in the Permian Basin in southeast New Mexico and West Texas, driven by high productivity of newly drilled wells.

Newly-completed wells in the Permian were producing an average of 433,000 barrels per day in their first month, the report read, while natural gas wells averaged 780 million cf/d.

“In the Permian, increased rates of production from new completions are offsetting existing wells’ production declines and leading to higher crude oil and natural gas output,” read the report. “These productivity increases indicate significant efficiency gains and technological advancements in the drilling and completion process.

“This new well production is more than offsetting the declines in production from existing wells.”

Adrian Hedden can be reached at 734-972-6855, achedden@currentargus.com or @AdrianHedden on the social media platform X.