Texas has long been the cornerstone of the American energy market, with operations that stand the test of time as well as several administrations. The Permian Basin has become an essential destination for the US energy market, with operations being developed by several of the world’s top energy companies. Now, Brazos Midstream has commissioned a new $185 million gas processing facility in the Permian, close to Martin County. Despite calls to diversify the global energy market, Texas is standing firm and fostering investments in the American energy market.
Texas offers substantial tax incentives for any energy operators planning to enter the market
For any energy company planning new projects, deciding where to establish operations can be challenging; however, some regions in the world and states in the US offer significant tax incentives to attract potential operators. Texas is one such state and has recently granted the Sundance II project the tax incentive it has been searching for.
Brazos Midstream’s Sundance II project has been selected by the state of Texas to receive substantial tax benefits. The Sundance II gas processing facility is a 300-MMcf/d natural gas processing plant in Martin County and has the potential to boost the region’s gas processing power. The project qualified under the state’s Texas Jobs, Energy, Technology, and Innovation (JETI) program.
The company has noted its expectation is for the Sundance II project to create $185 million in capital investment, marking the continued reliance on the energy potential of the Permian basin in the American energy market, as noted by the state’s Governor.
“Texas energy fuels the American economy. New investment in natural gas processing is essential to meet increasing energy demands. Working with innovative industry leaders, we will continue to power growth across critical sectors for a stronger, more prosperous Texas.” – Texas Governor Greg Abbott
Brazos Midstream’s presence in the Permian basin has been a boost to the local energy market
Brazos boasts one of the largest privately held natural gas midstream networks in the Permian, and through its planned Sundance II gas processing facility, is aiming to increase its standing in the American energy market. Once complete, the Sundance II project will increase the company’s Midland Basin processing capacity to 500 MMcf/d.
The aforementioned JETI designation means that Brazos will enter a 10-year school district and maintenance and operations tax appraised value limitation, with the aim of returning the favor by creating new employment for locals. Along with the state of Texas, the energy firm has partnered with the Stanton Independent School District, which is located in Martin County.
“With support from the state through incentive structures such as the JETI program, Brazos Midstream hopes to further leverage its existing large-scale energy infrastructure by building gas processing facilities located in Texas to drive additional job creation and economic growth.” – Brazos Midstream CEO Brad Iles
The new project comes as Japan has agreed with the United States to finalize $550 billion investment framework that will boost the US’s energy infrastructure tremendously over the coming years.
Other regions of the world are also planning substantial investments in energy infrastructure
The US boom in the Permian basin exemplifies the nation’s plans to increase investments in the midstream sector, but the United States is not the only nation aiming for a boost to the sector, as Afreximbank has launched a new $500 million fund to advance the sector in Africa. The global consensus is clear: the renewable energy market will continue to grow in the shadow of the necessary investments in the traditional energy sector. Brazos Midstream’s Permian operations are set to continue to grow in the near future, thanks in no small part to the tax incentives offered by Texas.
