Piñon Midstream, LLC (Piñon) announced its greenfield sour gas treating and carbon capture facility (the Dark Horse Facility) and its associated pipelines, compressor stations, and acid gas sequestration infrastructure were placed into service with the initial capacity fully subscribed.
The facility is operating near its initial treating capacity of approximately 85 million cubic feet per day (MMcf/d) of sour natural gas.
Located in Lea County, New Mexico, the Dark Horse Facility brings a state-of-the-art, purpose-built sour gas treating and carbon capture facility to the Delaware Basin. The facility was specifically built to capture and permanently sequester both carbon dioxide (CO2) and hydrogen sulfide (H2S) from operators’ natural gas volumes and redeliver their “sweet” gas to third-party midstream processors within the region.
Growth Plans Underway for the Dark Horse Facility
Piñon is near completion on the installation of a second amine treating plant (“Plant 2”), expected to be completed in October 2021. When operational, the second amine plant will increase treating capacity of the Dark Horse Facility to approximately 170 MMcf/d.
“We are excited to announce that our Dark Horse Facility is open for business,” said Piñon Midstream Co-Founder and President Steven Green. “The producers in our area have had a dire need for a long-term and environmentally friendly solution to the extreme acid gas concentrations that have previously challenged the region. By removing and sequestering these gases, the Dark Horse Facility makes it possible for operators to realize a single-source solution to CO2 and H2S contaminants that are prevalent throughout the basin.”
“We are also excited to announce that the capacity of Plant 1 is fully subscribed along with a portion of the capacity in Plant 2,” said Piñon Midstream Co-Founder and Chief Commercial Officer Justin Bennett.
The Dark Horse Facility and associated infrastructure includes a centralized amine treating plant (“Plant 1”) along with an 18,000-foot-deep acid gas sequestration well (“Independence AGI #1”), 40,000 horsepower of full NACE field and plant compression, and 30 miles of high-pressure gathering and redelivery pipelines. The facility is expandable to treat up to 400 MMcf/d of sour gas.
Piñon’s Independence AGI #1 is New Mexico’s deepest and largest acid gas injection well, with the capacity to permanently sequester up to 175,000 tons of CO2 and 75,000 tons of H2S annually. Sequestration capacity for the Dark Horse Facility will double when the Independence AGI #2 well is completed and placed into service. Independence AGI #2 is scheduled for completion in 2022.
New Senior Secured Credit Facility
In August 2021, Piñon closed on a new senior secured credit facility with BOK Financial. The proceeds will be used to fund expansion projects and for other general business purposes.
“Piñon is very excited to partner with BOK Financial to support our system buildout and growth objectives,” said David Cargill, Piñon’s Vice President of Finance. “This facility, combined with our equity commitment from Black Bay Energy Capital, provides ample liquidity to satisfy the growing demand for sour gas treatment and carbon capture solutions in the Delaware Bas
