Rising production benefits midstream MLPs in the Permian Basin (Part 7 of 8)
Atlas Pipeline Partners’ assets in the Permian
Atlas Pipeline Partners LP operates in the gathering and processing segments of the midstream natural gas industry. The company’s assets are located primarily in the Anadarko, Arkoma, and Permian basins of the southwestern and mid-continent regions of the United States and in the Eagle Ford Shale in south Texas and Appalachian Basin in the northeast region. APL also provides NGL transportation services in the southwestern region of the United States.
APL’s assets in the Permian
The WestTX natural gas gathering pipelines are located across seven counties within the Permian Basin in West Texas. It processes through four plants at the facilities at Consolidator, Driver, Midkiff, and Benedum. Pioneer Natural Resources Company (PXD), a major producer in the Permian Basin, owns the remaining interest in the WestTX system. APL anticipates and anticipates serving Pioneer’s wells in the Spraberry Trend of the Permian Basin. The primary producers on the WestTX gathering system include COG Operating LLC, Laredo Petroleum Inc., and Pioneer Natural Resources USA Inc.
APL’s new plans in the Permian
APL is constructing a new 200 million-cubic-feet-per-day processing plant, known as the Edward plant. The plant is expected to be in service in 2Q14. The additional plant will increase the WestTX aggregate processing capacity to approximately 655 million cubic feet per day from the current capacity of 455 million cubic feet per day at this segment.
Recently, APL has approved the construction of a new 200 million-cubic-feet-per-day processing plant. The plant is to be located in the northern part of the Permian and is expected to be in service in 2Q15. This new plant and the Edward plant will serve the increasing activity in the Permian Basin, increasing the company’s processing capacity in the Permian Basin to 855 million cubic feet per day, after completion. The construction costs for the plant are expected to be $100 million to $120 million. The majority of the capital is scheduled to be invested in 2015.
APL’s contract with PXD in Permian
APL has recently executed a contract extension with Pioneer Natural Resources (PXD). The contract extends further from the originally contracted timeline in 2022 and now expires in 2032. It has similar contract terms as the previous contract while also including further areas of mutual interest. Currently, PXD and APL are working together to further develop an increasing footprint in the Permian Basin—one of the most lucrative oil and gas producing regions in the United States.