San Mateo Midstream plans 300 MMcf/d New Mexico gas expansion and 20-mile pipeline
Energy companies may be in competition with each other when it comes to being in the running to be appointed for massive projects. Still, they are able to put the competition aside and adopt strategies that will allow nations to reach certain targets. This is the case at the moment during the energy transition, where companies are aiming to help nations reach certain clean energy targets. However, there is a gap in the execution of fossil fuel-based projects, which is where some of the companies can take full advantage and invest in projects. It was recently revealed that San Mateo Midstream plans a 300 MMcf/d New Mexico gas expansion and a 20-mile pipeline.
A gradual rise: Assessing how San Mateo turned into a midstream powerhouse
San Mateo Midstream is a well-respected company that is headquartered in Dallas, Texas, United States, although the company is seeking to establish a nationwide and eventually a worldwide presence. It is a midstream joint venture that is owned 51% by Matador and 49% by an affiliate of Five Point.
San Mateo provides natural gas gathering, treating and processing, produced water gathering and disposal, and oil gathering and transportation services to Matador. Energy companies that are able to offer a wide range of services increase their chances of being appointed to spearhead groundbreaking initiatives in the future.
The new commercial agreements are expected to add meaningful long-term volumes across San Mateo’s existing gathering and processing footprint.
There are many companies that are looking to adopt the idea of joint ventures as they have become aware that it is better to share the risks and financial responsibilities that are involved in executing large-scale projects.
Breaking barriers: San Mateo Midstream plans 300 MMcf/d New Mexico gas expansion
The execution of an energy project is so multifaceted in ways that the general population may not always be privy to. A press release from San Mateo Midstream revealed the company’s plans for a 300 MMcf/d New Mexico gas expansion and 20-mile pipeline. It announced that two of its wholly-owned subsidiaries have entered into two agreements with a large producer in the Northern Delaware Basin:
New Long-Term Agreement: a new long-term fixed fee natural gas gathering and processing agreement for San Mateo to gather and treat natural gas from certain newly dedicated acreage in Lea and Eddy Counties, New Mexico, and process such natural gas at the Marlan natural gas processing complex.
The second is a Long-Term Extension of Existing Agreement: an amendment to extend the natural gas gathering and processing agreement for San Mateo to continue to gather and treat natural gas from Eddy County, New Mexico, and process such natural gas for several years past the original term at the Black River natural gas processing plant.
Delving deeper into the 20-milepipeline gas expansion plan by San Mateo
The new agreement consists of large-scale acreage dedication. The total volume gathered and processed under the agreements is expected to provide San Mateo with substantial long-term volume growth and increased utilization of its integrated midstream infrastructure.
The new commercial agreements are expected to add meaningful long-term volumes across San Mateo’s existing gathering and processing footprint. To provide service for these volumes and the anticipated volumes from Matador, San Mateo expects to utilize existing infrastructure and construct a new natural gas processing train.
Looking ahead: San Mateo’s Growth and Capital Expenditure Update
San Mateo has massive plans that it hopes to carry out in the near future. The company plans to expand its Marlan Plant by adding a 300 MMcf per day natural gas processing train and a new nitrogen rejection unit. San Mateo is also expecting to construct approximately 20 miles of natural gas pipeline to connect up the new dedicated acreage, along with a field treating facility for carbon dioxide removal.
Under both agreements, San Mateo will provide long-term, fee-based natural gas gathering, processing, treating, and related midstream services supporting this producer’s development of its Northern Delaware Basin acreage. It is important that when various entities enter agreements, they complement each other effectively so that projects can be executed accordingly and within the required timeline.
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