Pinnacle Midstream II Plans Gathering, Compression System in Midland Basin
HOUSTON (P&GJ) — Pinnacle Midstream II on Tuesday said it has signed a 15-year gas gathering, processing and purchase agreement with DoublePoint Energy that anchors Pinnacle’s greenfield build of a new natural gas gathering and compression system in the Midland Basin.
The Pinnacle Dos Picos Gathering System is expected to come into service in the second quarter of 2021 and supports the extensive multiwell pad development taking place in the Midland Basin. The system initially will service Midland, Martin and Glasscock counties, Pinnacle said, with future expansions planned as producer activity increases.
Houston-based Pinnacle said its Dos Picos Gathering System will give producers access to the industry’s newest gathering and compression engineering technologies designed to accommodate high volumes associated with multiwell pad development and centralized drilling campaigns.
“DoublePoint has some of the best and proven acreage in the basin,” Pinnacle Midstream II CEO J. Greg Sargent said. “We believe the Pinnacle Dos Picos System’s strategic location will be a game changer for DoublePoint and many other producers operating in the Midland Basin.”
The initial system will consist of more than 50 miles of primarily 16-inch low- and high-pressure gas gathering mainlines, compression facilities and access to multiple in-basin gas processing options providing producer optionality to deliver product to multiple markets. The system will allow for rapid expansion with the addition of further gathering and compression facilities as necessary.
“The system is engineered for top-of-class runtime that will handle the increasing volumes of hydrocarbons the region’s extensive existing and undeveloped formations are expected to generate,” the company said in an announcement of the agreement.
Pinnacle, which is backed by growth capital from its management and Energy Spectrum Capital, said is discussing additional dedications and services with other producers.
“The Pinnacle team’s proven ability to plan and execute on midstream infrastructure projects that anticipate their customers’ critical needs is second to none in the industry. We are very happy to be a proud partner in Pinnacle’s ongoing successes,” said Energy Spectrum Partner Mike Mayon.
Kirkland & Ellis LLP served as legal counsel to Pinnacle in the deal, and DoublePoint was represented by Thompson & Knight LLP.
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