Atlas Pipeline to build more gas processing in West Texas

Atlas Pipeline Partners LP, Pittsburgh, Pa., will build a 200-MMcfd cryogenic processing plant in West Texas to handle rapidly increasing Permian basin production. The Edward plant will have initial capacity of 100 MMcfd, and Atlas expects it to be in service in second-half 2014.

The company noted that, as production increases behind its system, additional compression and refrigeration equipment will increase the plant’s capacity to 200 MMcfd and come into service “as needed.”

Completion of the full plant will increase Atlas’ processing capacity on its WestTX system to 655 MMcfd from 455 MMcfd, expanding beyond the 200-MMcfd Driver plant addition that was brought into service in April.

Atlas projects the cost for the Edward plant at $100-120 million for both phases with most of the plant’s capital expenditures in 2013-14. Additional future capital expenditures will be for expected compression and well connection costs as needed.

Atlas Pipeline's partner on the WestTX system, Pioneer Natural Resources Inc., which owns a 27.2% interest in the plant, will “participate in the project’s costs and cash flows and will anchor the production growth behind the expansion,” complemented by third-party producer customers.

Earlier this year, Atlas agreed to buy Eagle Ford shale gas gathering and processing company Teak Midstream LLC. Assets included Teak’s 200-MMcfd Silver Oak I cryogenic processing plant, 265 miles of 20-24-in. OD high-pressure rich gas gathering lines with 750 MMcfd, and a second 200-MMcfd cryogenic processing plant Silver Oak II, expected to begin operating in first-quarter 2014.

At the time, Atlas said it expected further expansion of the acquired Eagle Ford assets beyond 2014, including the potential to add a third 200 MMcfd processing plant and additional gathering pipelines (OGJ Online, Apr. 17, 2013).

In 2012, Atlas acquired Cardinal Midstream LLC, active in the Woodford Arkoma basin (OGJ Online, Dec. 5, 2012).

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