Crestwood expanding rich gas service in Southwest

Crestwood Midstream Partners LP is converting a portion of a natural gas-gathering system into rich gas service in New Mexico and constructing a cryogenic natural gas-processing plant there. According to a press release, the natural gas-processing facility will have a capacity of 20 million cubic feet per day. Crestwood is also constructing additional gathering pipelines across the area to support the 2014 and 2015 drilling efforts of Legend Natural Gas III LP.

Crestwood estimates this leg of its Willow Lake Project will cost between $25 million and $30 million, and it expects to complete this portion in the third quarter of 2014. A future phase of development will take place when additional producers drill sufficient wells to warrant the additional processing capacity, the company adds.

Crestwood’s project, located in Eddy County, N.M., originated last year with the conversion of an existing Crestwood gathering pipeline and the installation of natural gas liquids field separation equipment to support Legend. Crestwood and Legend have a 10-year, fixed-fee gas gathering and processing agreement covering more than 107,000 acres. In addition, Crestwood has purchased Legend’s existing gas-gathering system, which is being integrated into its existing footprint.