Meritage starts up new Powder River basin gas processing plant

Thunder Creek Gas Services LLC, a subsidiary of Meritage Midstream Services II LLC, has commissioned its previously announced Steamboat I cryogenic natural gas processing plant in Converse County, several miles west of Douglas, Wyo. (OGJ Online, May 14, 2019).

In service as of Mar. 5, the new 200-MMcfd plant has more than doubled the operator’s previous total gas processing capacity in Wyoming’s Powder River basin to 380 MMcfd, Meritage said.

Located in the southern portion of the basin, the Steamboat plant—which lies on a site large enough to accommodate two additional 200-MMcfd cryogenic processing plants as customer demand warrants—complements Meritage’s 50 Buttes plant in Campbell County near Gillette, Wyo., about 100 miles north of the Steamboat complex.

Alongside the gas plant, Meritage also confirmed it has completed a new 60-mile, 20-in. trunk line connecting the Steamboat I plant to the company’s Thunder Creek gas gathering system. Both the Steamboat I and 50 Buttes processing centers connect to Wyoming Interstate Co.’s Bow Lateral pipeline system for residue gas, with NGLs from both locations currently flowing through Meritage’s Thunder Creek NGL pipeline to Oneok’s Niobara Lateral and Elk Basin pipeline systems.

Gathering, processing agreement

Meritage additionally said it has entered into a major, multiyear gathering and processing arrangement with an unidentified large, independent oil and natural gas producer in the Powder River basin, which will provide Meritage with a minimum volume commitment from a high-quality, investment-grade counterparty supporting a substantial portion of the company’s gathering and processing capacity.

Alongside its newly expanded gas processing capacity, Meritage’s Powder River basin operations now include 1,600 miles of gas gathering pipeline, 120 miles of NGL pipeline, and 168,000 hp of compression, all underpinned by acreage dedications from its existing customers in excess of 1 million acres.

The operator said 47% of rigs currently operating in Powder River basin are operating on acreage committed to its Thunder Creek system, up from 42% in 2019.

During 2019, Meritage said its Thunder Creek Gas Services subsidiary connected a total of 119, with system volumes averaging more than 170 MMcfd. NGL volumes transported on the Thunder Creek NGL pipeline in 2019 averaged over 10,000 b/d.

In 2020, Meritage expects to connect about 100 wells to its system to grow system volumes by more than 30%. The company projects fourth-quarter 2020 system volumes to average between 250-270 MMcfd, with NGL volumes transported on Thunder Creek NGL pipeline to average about 18,000-20,000 b/d.