U.S. Natural Gas Demand Drives Expansions in Permian, Other Shale Plays

As demand for U.S.-based natural gas is skyrocketing--both domestically and abroad--gas-processing companies are struggling to keep pace with new and expanded facilities in some of North America's most prosperous shale plays. Industrial Info is tracking more than $2.5 billion worth of gas-processing projects that are set to begin construction in the third quarter, more than half of which is attributed to expansions of existing natural gas plants.

Enterprise Products Partners LP?(NYSE:EPD) (Houston, Texas) is among the biggest spenders in this sector, with a?$150 million second train at its gas-processing plant near Mentone, Texas. Located in the heart of the Permian Basin, the project is set to begin construction later this summer. This will double the Mentone plant's capacity to 600 million standard cubic feet per day of natural gas and 60,000 barrels per day (BBL/d) of natural gas liquids (NGL). Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can read more in a detailed?project report.

Enterprise also is preparing to build its?sixth gas-processing plant in the Permian's Midland Basin, in Garden City, Texas. The facility will process up to 350 million standard cubic feet per day of gas. Enterprise assumed control of the project when it acquired Navitas Midstream Partners LLC from an affiliate of private equity firm?Warburg Pincus LLC?(New York, New York) earlier this year. Navitas Midstream provides natural gas gathering, treating and processing services in the core of the Midland Basin. Subscribers can learn more from Industrial Info's detailed?project report.

The Midland Basin accounts for about 20% of active U.S. onshore drilling.?Energy Transfer LP?(NYSE:ET) (Dallas, Texas) is among the other companies developing a role in the Midland, including a?fourth train at its Arrowhead Complex in Coyanosa, Texas. The cryogenic gas-processing train will add 200 million standard cubic feet per day of processing, bringing the plant's total capacity to 800 million standard cubic feet per day. Subscribers can learn more from Industrial Info's detailed?project report.

"Permian Basin volumes continue to be strong, and Midland inlet volumes remain at or near record highs," said Tom Long, the chief financial officer of Enterprise Products, in a recent quarterly earnings-related conference call. He said the company is continuing to increase its processing capacity in the Midland area to accommodate incremental demand growth.

Although Texas receives the bulk of the attention when it comes to Permian projects, southeastern New Mexico plays a significant role in the shale play's activity.?Targa Resources Corporation?(NYSE:TRGP) (Houston, Texas) is bolstering its presence in the area's Delaware Basin with its recently announced plan to purchase?Lucid Energy Group LLC?(Dallas, Texas). Lucid is planning a?third gas-processing plant in the area surrounding Jal, New Mexico, with a capacity of 200 million standard cubic feet per day. Subscribers can learn more from Industrial Info's detailed?project report?and June 20, 2022, article -?Targa Resources Grows Delaware Basin Holdings with $3.5 Billion Purchase.

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