New Mexico Oil Patch Gets Major Processing Investment

May 07, 2018

Kevin Robinson-Avila | Albuquerque Journal | May 7, 2018

ALBUQUERQUE, N.M. — Sendero Midstream Partners LP will invest $750 million in four new natural gas gathering and processing plants in southeast New Mexico over the next five years.

The company announced its plans Monday morning during inauguration ceremonies for its Sendero Carlsbad Gas Processing Plant about 10 miles south of Carlsbad, which began operating in December. That $220 million plant and pipeline system can process up to 130 million cubic feet of natural gas per day.

Once Sendero’s other New Mexico facilities are built, local processing capacity will surpass 1 billion cubic feet per day, said Sendero President and CEO Clay Bretches. All the facilities will serve oil and gas producers in the Delaware Basin, an extremely productive rock formation that protrudes from southwest Texas northward into Eddy and Lea counties.

“The Delaware is one of the most prolific areas for oil and natural gas production in the entire world, and Sendero’s investments are a recognition of the significant needs for midstream services in a rapidly developing basin,” Bretches said.

The company’s next plant will also be in Eddy County, where the company is negotiating for industrial revenue bonds to begin construction. The company is still considering locations for the next three plants, Bretches said.

Sendero employed about 150 people per day on average during construction of the Carlsbad plant, which began in January 2017. It now employs about 15 permanent workers.

“Over the next five years, we expect to continue employing about 150 people on average per day as we build out the other four plants,” Bretches said. “When all the plants are operating, our permanent workforce will rise to about 70 people.”

The new Carlsbad facility marks Sendero’s first thrust into production after forming in 2014. A privately held firm owned by New Jersey-based Energy Capital Partners, the company spent nearly three years scouting the U.S. for the best basins and drilling partners before settling on the Delaware, Bretches said.

Sendero is one of a half dozen companies that have built or expanded natural gas processing plants in the Delaware since 2015. That’s a new development for New Mexico, since most processing facilities have traditionally been located across the border in Texas.

“It’s great to see New Mexico winning battles to attract new businesses to our side of the Permian Basin, rather than the Texas side,” said New Mexico Oil and Gas Association Executive Director Ryan Flynn.