Sendero eyes up to $300 million expansion into Lea
At least a part of Sendero Midstream’s planned additional $750 million investment in the Permian Basin area likely will come to Lea County, at a tune of $150-$300 million, according to Sendero’s president and CEO Clay Bretches.
The Houston-based company celebrated the opening of a new Permian Basin Gas Plant near Loving by announcing plans to invest an additional $750 million in the region to support increased oil and natural gas production from the flourishing Permian Basin.
Sendero Midstream is a privately held company owned by Energy Capital Partners.
The Sendero Carlsbad Gathering and Processing System, at a construction cost of about $130 million, began operations in the fourth quarter of 2017 serving several producers in the Northern Delaware Basin in Eddy County. Current services include low pressure gas gathering, field compression, gas dehydration and delivery of high pressure gas to the Sendero Carlsbad Gas Processing Plant.
The Carlsbad system includes more than 50 miles of gas pipelines ranging in diameter from 8 inches to 12 inches.
Over the next five years, Sendero plans to expand its gas gathering and processing system with four additional plants, including pipelines and compressing systems to handle in excess of one billion cubic feet per day of produced natural gas, according to a company news release.
The company plans to begin construction of a second plant in Eddy County next month, then begin extending a pipeline to Lea County where at least one plant likely will be constructed near Jal in 2019 or 2020, depending on the market, Bretches said.
“We really do hope to have two plants there when this is all said and done,” he added. “There’s so much activity in that area that we really believe very strongly that that activity will merit more gas processing plants in the area and we want to be one of the first movers in the area.”
The expansion and investments are expected to create 150 contract employees per year over the next five years of construction with approximately 70 permanent, full-time employees expected to be in place by 2022.
“The Permian’s Delaware Basin is one of the most prolific areas for oil and natural gas production in the entire world, and Sendero’s investments are a recognition of the significant needs for midstream services in a rapidly developing basin,” Bretches said. “Our initial gas processing plant and future plans show that the future of Southeast New Mexico and the Permian Basin is very bright.”
The Carlsbad system boasts a cryogenic gas processing plant with a capacity of 130 million cubic feet of gas per day and 37,000 horsepower of gas compression.
Economic Development Corporation of Lea County president and CEO Steve Vierck confirmed contact with Sendero, both in visits to Houston and company visits to Lea County.
“We’ve had multiple meetings with Sendero. They have visited here at least three times,” he said. “As they announced, they have examined Lea County for one or more facilities. It’s essentially still in process.”
Other midstream companies are also showing interest in developing facilities in Lea County.
“There are substantial increased volumes of oil and natural gas in Lea County, and there’s been significant interest from the midstream sector in processing some of those increased volumes,” Vierck said. “Sendero is one of three companies that we’ve worked with that has done very in-depth analysis of this market.”
Sendero’s gas systems are not only providing critical capacity in the region for natural gas, but help minimize emissions of methane and flaring of natural gas, the company’s news release said.
Company officials said Sendero intends to continue hiring and training locally as all of the permanent employees at the first plant are Carlsbad area residents.