The Permian needs more gas gathering and processing capacity pronto to support the expansion of crude-oil-focused drilling, and one of the Permian’s last privately held midstream companies is stepping up in a big way with the buildout of an entirely new — and very expandable — network in the Midland Basin. In today’s RBN blog, we discuss the impending startup of a new Brazos Midstream processing plant in Martin County, its plans for another Midland-area plant and the company’s already expansive midstream holdings in the Delaware Basin. As you’ll see, Brazos’s strategy echoes that of a well-known predecessor.
The new gas-related infrastructure the Permian needs to support continued growth in crude oil production has been the topic of several blogs the past few months — among them, OMG, All My Rowdy Friends Have Settled Down and, most recently, Up Around the Bend. Each hammered home the same theme, namely that Permian oil production can only grow as quickly as the ability of gas gathering systems, gas processing plants and takeaway pipelines to handle the vast volumes of associated gas that emerge from West Texas and southeastern New Mexico wells with the shale play’s “black gold.”
By our count, some 3,300 MMcf/d — 3.3 Bcf/d! — of new gas processing capacity is slated to come online in the Permian between now and mid-2026, and plans for at least a few more processing plants beyond that are in the works but not yet announced. Just as important, the 2.5-Bcf/d Matterhorn Express Pipeline from the Waha Hub to the Katy, TX, area is expected to come online as soon as September and several other gas takeaway projects are on the horizon, including the 2.5-Bcf/d Blackcomb Pipeline (see Southern Cross) from Waha to South Texas (scheduled to start up in the second half of 2026) and, very likely, the 2-Bcf/d Warrior Pipeline from Waha to East Texas (expected to reach a final investment decision, or FID, this fall). Other takeaway projects are possible too.
All this gas-related midstream investment reflects the confidence among producers, shippers and others that Permian drilling-and-completion activity will continue increasing from its current record-setting pace — about 6.2 MMb/d of crude oil and 18.6 Bcf/d of gas, according to RBN’s weekly Crude Oil Permian and NATGAS Permian reports.
That optimism is particularly strong in the heart of the Permian’s Midland Basin, where Brazos Midstream — backed by Old Ironsides Energy and Encap Flatrock Midstream, with additional support from EOC Partners and Elda River Capital — first gained a foothold there in November 2021 with the purchase of Diamondback Energy’s Mustang Springs gas gathering system in central Martin County. Since then Brazos has been securing acreage dedications and gathering and processing (G&P) commitments from a growing list of large producers and building out a new gathering system and its first processing plant in the Midland.
Brazos Midstream said August 15 that the 200-MMcf/d plant (tan square in upper-center of Figure 1 below), located in southern Martin County and named Sundance I, is now mechanically complete and scheduled to begin commercial operation in October. The company also said it is adding another 49 miles of 16-to-24-inch-diameter, high-pressure (HP) gathering pipeline to the 118 miles of HP pipe already in place and in operation in the Midland. (The solid brown lines show the existing and under-construction HP lines.) The gathering system, which already has 93 miles of existing or planned low-pressure (LP) pipe (blue lines) and 10 existing or under-construction compressor stations (small black and blue squares, respectively), spans parts of five counties (Glasscock, Howard, Martin, Midland and Reagan), with future extensions into Ector and Upton counties (dashed brown lines) likely.
The new processing plant is fitted with front-end amine treatment (for hydrogen sulfide and carbon dioxide removal), recycle split vapor (RSV) technology (to maximize ethane recovery when that is desired) and a back-end nitrogen rejection unit (NRU) capable of handling gas with a blended nitrogen content of up to 5%. (As we said in It’s a Gas Gas Gas, our blog on high-nitrogen gas in the northern Midland, an NRU super-chills the natural gas stream after NGLs have been removed to momentarily liquefy a portion of the gas plant’s methane output. The nitrogen, which remains in a gaseous state, is then separated from the methane, which is then re-gasified.)
The residue gas from Sundance I will flow into the 2.5-Bcf/d Whistler Pipeline to South Texas and the aforementioned Matterhorn Express to Katy. Mixed NGLs (aka Y-grade) from the plant will flow into ONEOK’s West Texas LPG Pipeline to the NGL fractionation and storage hub in Mont Belvieu, TX.
Brazos Midstream also announced August 15 that it will build a 300-MMcf/d gas processing plant in the Midland Basin that is scheduled to begin operation in the second half of 2025. The company has room for a total of three processing plants at the Sundance site in southern Martin County and for another three at a site in western Glasscock County. As the large pipe diameters in the company’s HP gathering system and the space for more processing plants suggest, Brazos has ambitious plans for growth. Best of all, as we see it, the sheer newness of its Midland assets — the steel pipe, the new processing plant and its NRU, even the connections to two of the Permian’s newest gas takeaway pipelines — and the system’s location near the epicenter of Midland production growth are likely to draw both expanded business from existing customers as well as connections with other E&Ps in the area.
Brazos Midstream’s Midland strategy is reminiscent of another then-private company, Navitas Midstream Partners. After an initial investment in gas gathering assets in the basin, Navitas undertook an aggressive expansion that added more than 700 miles of new gathering pipe and what became a five-plant processing complex with more than 1 Bcf/d of capacity along the border between Midland and Glasscock counties. Enterprise Products Partners acquired Navitas for $3.25 billion in February 2022 and subsequently added two more Midland plants totaling 600 MMcf/d.
But while Navitas was laser-focused on the Midland Basin, Brazos Midstream also has a strong — and considerably longer — presence in the Delaware Basin (see Figure 2 above). Initially backed in that part of the Permian by Old Ironsides Energy, Brazos started out in 2015 by partnering with Jetta Operating Co. to build out and upgrade a small crude and gas gathering system in West Texas’s Ward and Reeves counties. As we detailed in our Have It All blog series, Brazos lined up a series of acreage dedications and G&P contracts and acquired or built out an impressive collection of midstream assets, including three gas processing plants with a combined 460 MMcf/d of capacity at its Comanche complex in Reeves County (tan square in lower-right). In May 2018, Old Ironsides closed on the sale of Brazos’s Delaware Basin holdings to an investment fund managed by Morgan Stanley Infrastructure (North Haven Infrastructure Partners II, or NHIP II) for $1.75 billion. Today, Brazos has 540,000 dedicated acres and 25 customers in the Delaware, with about 70 miles of crude gathering pipelines, 825 miles of gas gathering pipes (brown and blue lines), 18 compression stations (small black squares), that same 460 MMcf/d of gas processing capacity at Comanche, and two oil terminals with a combined 75 Mbbl of storage (green triangles). The residue gas out of the Comanche complex flows into the El Paso Natural Gas (EPNG) pipeline system and the Whistler Pipeline and the NGLs into the Shin Oak and EPIC NGL pipelines. [Shin Oak is co-owned by Enterprise (67%) and Kinetik Holdings (33%) while EPIC NGL is owned by EPIC Midstream.]
In sum, Brazos Midstream’s ongoing expansion in the Midland Basin is aimed at giving producers there exactly what they want and need: a spankin’ new, seemingly oversized gathering system that they can grow into. It’s not hard to imagine a time, just a few years from now, when miles and miles of new gathering lines — and two or three more large, RSV-style processing plants fitted with NRUs — are added to that system, and the crude oil, natural gas and NGL production across the core of the Midland Basin served by Brazos is much higher than it is today.
“Giving You the Best That I Got” was written by Anita Baker, Skip Scarborough and Randy Holland. It appears as the third song on Anita Baker’s third studio album of the same name. Released as a single in September 1988, it went to #1 on the Billboard Adult Contemporary chart and #3 on The Billboard Hot 100 Singles charts. Personnel on the record were: Anita Baker (lead vocals), Vernon D. Fails (keyboards), Dean “Sir” Grant (acoustic piano), Nathan East (bass), Omar Hakim (drums), Paulinhoda da Costa (percussion), and Alex Brown, Angel Edwards and Valerie Pinkston Mayo (backing vocals).
The album Giving You the Best That I Got was recorded in 1988 at Encore Studios in Burbank, CA; Yamaha International Recording in Glendale, CA; Hitsville Recording Studios and Producers 1&2 in Hollywood, CA; The Sound Suite in Detroit; and TMF Studios in New York City. Produced by Michael J. Powell, the album was released in October 1988 and went to #1 on the Billboard 200 Albums chart. It has been certified 3x Platinum by the Recording Industry Association of America. The album earned Baker three Grammy Awards. Three singles were released from the LP.
Anita Baker is an American singer and songwriter. She started her professional career singing for the Detroit band Chapter 8. After appearing on their debut album in 1979, Baker left to pursue a solo career, releasing her first solo album, The Songstress, in 1983. She has released seven studio albums, one live album, one compilation album and 24 singles and has sold over 17 million records worldwide. Her 2005 holiday album, Christmas Fantasy, was her most recent release. Baker still does occasional live performances.