Salt Creek Midstream LLC has ordered long-lead equipment for a fourth cryogenic natural gas processing plant at its Pecos Processing Complex in Reeves County, Tex.
Slated for final investment decision by yearend 2026, the proposed Pecos IV train project, if approved, would add up to 300 MMcfd of capacity and enter service in second-half 2028, the operator said in a release Nov. 11.
Depending on a final capacity decision for the project, the expansion could lift the company’s overall installed Permian gas processing capacity to as much as 900 MMcfd.
With the Pecos site designed for further expandability up to 1.2 billion bcfd from its current 600-MMcfd capacity, Salt Creek said it has also now secured grid power to support that potential buildout.
The proposed project follows customer and volume growth across Salt Creek’s Delaware basin system, which the company said will exceed its existing system’s 600 MMcfd of processing capacity in first-half 2027.
To support its planned Permian growth program, Salt Creek confirmed it has also secured strategic offloading contracts to provide firm processing capacity as a bridge to the planned expansions. Those offloads are scheduled to enter service by the end of first-quarter 2027, according to the operator.
Salt Creek reported the addition of nearly 300,000 acres dedicated across the Permian’s eight core counties, following additional acreage commitments signed earlier in the year. The dedications cover more than 20 unidentified customers.
The operator said it expects about 75% of anticipated 2027 throughput to come from investment-grade counterparties, while customer volume commitments to support about 35% of projected volumes.
The company’s acreage position includes about 40,000 dedicated acres in the liquids-rich core of the Woodford fairway, along with additional exposure to prospective areas. Salt Creek estimated Woodford volumes to exceed 200 MMcfd by yearend 2027 based on more than 600 future well locations in the play.
Salt Creek recently completed a 13-mile, 20-in. pipeline loop along its eastern trunkline system. The loop increases available high-pressure gathering capacity out of Lea, Winkler, and Loving Counties, Tex., by as much as 40%.
For 2027, the company said it plans to add 80 MMcfd of compression-station capacity and 20,000 hp of company-owned low-pressure gathering compression. Including those additions, Salt Creek would operate about 80,000 hp of owned low-pressure gathering compression across 20 compressor-station sites.
The operating expansion comes alongside the operator’s recent refinancing. Salt Creek completed a $980 million first-lien term loan due 2031, using net proceeds to repay existing first- and second-lien term loans due 2027.
Salt Creek also confirmed entering into a $35 million super-priority revolving credit facility due 2031, undrawn at close and carrying a $40 million accordion feature.
Crude-gathering assets sale
Financial support for the proposed expansions also would presumably be supported by Salt Creek’s divestment of its crude oil gathering business in August to Enbridge Inc. in a $600-million deal under which Enbridge will acquire 100% interests in the Orla and Wink North systems and a 50% interest in the Delaware Crossing system.
The systems include about 500 miles of Delaware basin gathering infrastructure, with combined throughput capacity of 420,000 b/d and storage capacity of 350,000 bbl. They serve more than 20 producers and are supported by about 320,000 net dedicated acres under long-term agreements, with an average remaining contract life of about 10 years.
The parties said the transaction remains scheduled to close later this year, subject to customary closing conditions.
