Denver-based Meritage Midstream Services has announced the company will be expanding beginning in January, according to the Denver Business Journal. Meritage Midstream is a natural gas and crude oil treatment, gathering and transportation company. Their expansion will be coming via a 108-mile segment of new Wyoming pipeline that will carry natural gas liquids.
In August 2013, Meritage acquired a natural gas gathering, treating and processing company Thunder Creek Gas Services from Devon Energy Corporation. The Thunder Creek system is one of the essential natural gas outlets that operate in Wyoming’s coal-rich Powder River Basin. Meritage’s new 108-mile pipeline will be in correlation with the Thunder Creek system. Pipeline operations will begin in January, with the pipeline carrying natural gas liquids out of the Powder River Basin.
The new pipeline will be a joint effort between Meritage and Phillips 66. Meritage has already constructed 22 miles of pipeline and has signed a long-term lease with Phillips 66 to ship the natural gas liquids another 86 miles via a pipeline owned by Phillips 66. Meritage says the combination of its newly built pipeline will allow its customers’ natural gas liquids from Meritage’s 50 Buttes natural gas processing complex in Gilette, Wyoming to a connection point in Douglas, Wyoming with Phillips 66’s Powder River Pipeline.
Meritage’s 50 Buttes processing plant is a newly-owned and operated natural gas processing plant in Campell County, Wyoming. The plant has a processing capacity of up to 70 million cubic feet of natural gas per day. The company says it expects the processing capacity to double by late 2015 and was built to hold up to 300 million cubic feet per day.
Once the natural gas liquids enter the Phillips pipeline, they head south 600 miles to Texas where it is then processed and refined. Currently, the pipeline can carry about 15,000 barrels of natural gas liquids per day, however, Meritage says that number will double as demand increases. Steve Huckaby, Chief Executive Officer of Meritage, says he expects the pipeline to reach the 30,000 barrel capacity in about a year.