Meritage Doubles Powder River Basin Processing Capacity

Meritage Midstream Services II LLC (Denver) recently reported that its subsidiary, Thunder Creek Gas Services LLC, has completed commissioning of the Steamboat I processing plant in Converse County, Wyo., near the town of Douglas. The Steamboat plant more than doubles Meritage’s natural gas processing capacity in the Powder River Basin.

Meritage is a major midstream provider in the Powder River Basin with 380 MMcfd of processing capacity, 1600 miles of gas gathering pipeline, 120 miles of NGL pipeline, and 168,000 of compression horsepower, all underpinned by acreage dedications from its existing customers in excess of 1 million acres. Currently, 47% of the rigs operating in the Powder River Basin are operating on acreage committed to Meritage Midstream’s Thunder Creek system.

The new state-of-the-art cryogenic processing plant has a capacity of 200 MMcfd, and is located on a site large enough to accommodate two additional 200 MMcfd cryogenic processing units.

Strategically located in the southern portion of the basin, the Steamboat I plant complements Meritage Midstream’s existing 50 Buttes plant complex located approximately 100 miles to the north in Campbell County near Gillette, Wyo. A new 60-mile, 20-inch trunk line connects the Steamboat I plant to the Thunder Creek gas gathering system. Both the Steamboat and 50 Buttes processing facilities connect to Wyoming Interstate Co.’s Medicine Bow Lateral for residue gas, and NGLs currently flow from both facilities through Meritage’s Thunder Creek NGL (TCNGL) Pipeline to ONEOK’s Niobrara Lateral and Elk Basin System.

Meritage also announced it has entered into a significant, multiyear gathering and processing arrangement with a large independent oil and natural gas producer in the Powder River Basin. This contract provides Meritage with a minimum volume commitment from a high-quality, investment-grade counterparty supporting a substantial portion of the company’s gas gathering and processing capacity.

Meritage subsidiary Thunder Creek Gas Services connected a total of 119 wells to its system in 2019. System volumes averaged more than 170 MMcfd in 2019. NGL volumes transported on the Thunder Creek NGL pipeline in 2019 averaged more than 10,000 bbld.

In 2020, Meritage expects to connect approximately 100 wells to its system and grow system volumes by more than 30%. The company projects Q4 2020 system volumes to average between 250 MMcfd and 270 MMcfd, with NGL volumes transported on TCNGL to average approximately 18,000 to 20,000 bbld.

“With the completion of the Steamboat plant, Meritage is building on Thunder Creek’s successful 16-year history of owning and operating strategic gathering, treating, and processing assets in the Powder River Basin,” said Meritage Midstream president Nick Thomas. “The Steamboat plant will improve overall product recoveries, optimize system runtimes, and maintain attractive system pressures. This additional processing plant will further Meritage’s goal of providing Wyoming’s oil and gas producers with access to the largest and most technologically advanced natural gas and NGL midstream footprints in this prolific basin.”

(SOURCE: The Weekly Propane Newsletter, March 12, 2020. Available by subscription)