Nuevo Midstream

Issue Spring 14


The Delaware Basin has been around for tens of thousands of years, but recently people have begun to see the true value and potential of this deposit. Many companies are active in this region, seeing how the wealth of the basin will play out for them, but Nuevo Midstream is one operation that has shown its capabilities are allowing it to surpass the rest for the benefit of it and its customers.

“Recognizing the need for a rapid and robust response to the accelerating producer activity in the area, we have taken several aggressive steps in a planned, multiphase expansion to serve producers in the Delaware Basin,” President and CEO Jay Lendrum said in a statement.

Based in Houston, Nuevo Midstream’s operations are focused on the Delaware Basin area of the Permian Basin in west Texas and southeast New Mexico, allowing it to serve production from the Delaware Sands, the Avalon Shale trend and the Bone Springs and Wolfcamp formations. A full-service midstream operation, the company’s core capabilities include gas gathering, treating and conditioning, compression, processing, fractionalization, crude gathering and transportation, and NGL marketing.

Additionally, Nuevo Midstream explains that it owns and operates an expanding offering of pipeline, processing and delivery assets that have been designed to offer producers a timely, flexible and cost-effective way to deliver their products to high-value markets.

“When [customers] work with Nuevo, they’ll work with seasoned professionals who are flexible, collaborative, responsive and have the same sense of urgency and determination to help them succeed,” the company says. “Our team includes engineers and operations experts as well as marketing professionals with more than 200 years of combined experience in the industry and the region. We are all creative problem-solvers who understand the challenges producers face and are dedicated to aligning with drilling schedules to meet infrastructure requirements and provide flow assurances.

“We make our homes in Texas and New Mexico and have been doing business there for decades.”

Gas Gathering
One of the main benefits customers find in working with Nuevo is the capabilities of its Ramsey Gas Gathering System. This consists of more than 270 miles of high- and low-pressure natural gas-gathering pipeline, compressor and measurement stations. Nuevo explains the system crosses through Eddy and Lea counties in New Mexico, and the Texas counties of Culberson, Loving and Reeves. The company continues to upgrade and expand its system with additional pipeline and compression capacity, allowing it to interconnect with the El Paso Natural Gas pipeline and the Enterprise Products pipeline nine miles south of its Ramsey processing facility.

“With more than $308 million in equity commitments, we are well capitalized and will continue to expand our gathering footprint as producer demand and acreage dedications increase,” Nuevo says. “Our Ramsey plant includes 100 million cubic feet per day (MMcf/d) of cryogenic processing capacity and an additional 10 MMcf/d refrigerated joint-trench processing plant and fractionator, for 110 MMcf/d of total gas processing capacity. The Ramsey plant facility also includes 1,800 gallons per minute (gpm) of amine treating capacity. In spring 2014, we will bring an additional 200 MMcf/d in cryogenic processing capacity online, bringing total capacity to 310 MMcf/d.”

Ongoing Expansion
In October 2013, Nuevo completed a major expansion of its amine treating facility and began construction on Phase 3 of the expansion of its natural gas processing system in the Delaware Basin near Orla, Texas. Nuevo also completed its interconnect to DCP’s Sand Hills natural gas liquids (NGL) pipeline with NGL delivery into Mont Belvieu, Texas. This allowed Nuevo to offer producers access to premium NGL markets and excellent NGL recoveries through its 110 MMcf/d in processing capacity.

“We are pleased to announce another set of important company milestones,” Lendrum said in a statement. “Based on our producers’ drilling results, production forecasts and additional customer dedications, we continue to add processing, treating, gathering and compression capacity. Some of our customers are still in appraisal mode while others are entering the development phase, but they all need midstream services and we will continue to add capacity to stay ahead of their drilling plans.

“Two-and-a-half years ago, we were recommissioning an idle 10 MMcf/d processing plant for our first Avalon Shale and Bone Springs customer and installing a small rented treating plant with plans to truck and rail NGLs,” he continued. “Now, we have 310 MMcf/d of processing capacity and 1,800 gpm of treating capacity operational or under construction, and an expansive gathering system that spans roughly 2,500 square miles, an NGL line connection to Mont Belvieu and planning is underway to bring total cryogenic processing capacity to more than 900 MMcf/d and treating capacity to 3,800 gpm. The new senior credit facility along with our equity commitments, equipment lease facility and cash flow from operations provide us with plenty of capital to execute on our growth plans.”


Nuevo Midstream