U.S. Gas Processers Plot 1Q Buildouts to Keep Up with Demand

Researched by Industrial Info Resources (Sugar Land, Texas)--Increased demand for domestic power generation and liquefied natural gas (LNG) exports will drive up U.S. natural gas production about 1% in 2025, according to the U.S. Energy Information Administration (EIA), with much of the activity coming from the Permian, Eagle Ford and Haynesville shale formations. But that gas will need to be processed into something consumable, and downstream players are ramping up operations. Industrial Info is tracking more than $17 billion worth of U.S. natural gas-processing projects that are set to begin construction in the first quarter, with Texas accounting for the largest number.

Click on the image at right for a graph detailing the top five parent companies for U.S. gas-processing projects set to kick off from January through March.

Gas-processing activity in the Lone Star State is led by NextDecade LNG LLC's (NASDAQ:NEXT) (Houston, Texas) Rio Grande LNG export facility in Brownsville. The company is looking to begin construction on a fourth train at the facility, where the first three already are under construction. The fourth train would produce 5.9 million metric tons per year of LNG, in addition to the 17.6 million metric tons per year produced by the first three.

In August, NextDecade announced it had executed a $4.3 billion, lump-sum turnkey engineering, procurement and construction (EPC) contract with Bechtel Corporation (Reston, Virginia) for the construction of Train 4. Bechtel already is contracted for EPC work on the first three phases; NextDecade estimates the full cost for Train 4 will run from $6 billion to $6.2 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can read a detailed report for Rio Grande's Train IV and click here for a full list of detailed reports for projects associated with Rio Grande. For a broader look at the Rio Grande development, see November 11, 2024, article - NextDecade Soldiers on With Rio Grande LNG Plant.

"The facility continues to progress safely, in line with schedule, and on budget, and the site has significantly advanced in the past few months," said Matt Schatzman, the chief executive officer of NextDecade, in a press release. "The Bechtel team has done exemplary work, including continued pipe work for Train 1, completing the first foundation pour for Train 2, and preparing to begin deep soil mixing for Train 3. Bechtel has also laid feed gas piping and begun constructing walls for both storage tanks."

Other companies with Texas-based gas-processing projects include Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma), which is planning a $120 million debottlenecking at its Markham Gas Processing Plant in Matagorda, and Energy Transfer LP (NYSE:ET) (Dallas, Texas), which is preparing for a $30 million addition to its Grey Wolf Gas-Processing Plant in Kermit. The Markham project will allow the facility to process additional gas and natural gas liquids (NGLs) produced from Williams' expansion of its offshore Whale Field development, while the Grey Wolf project will help Energy Transfer to better remove acid gas, carbon dioxide (CO2) and hydrogen sulfide contaminants from 200 million standard cubic feet per day of gas sourced from the Permian Basin.

Subscribers can read detailed reports on the Markham and Grey Wolf projects.

New Mexico's share of the Permian also is seeing activity in the coming quarter: Targa Resources Corporation (NYSE:TRGP) (Houston) hopes to begin work on amine and dehydration units for a third train at its Red Hills Cryogenic Gas-Processing Plant in Jal, which sits on the state's southeastern border with Texas. Subscribers can learn more from a detailed project report.

The single highest-valued gas-processing project set for a first-quarter kickoff is Hilcorp Energy Company's (Houston) $12 billion expansion of its Point Thomson Oil & Gas Production Unit in Prudhoe Bay, on Alaska's North Slope, which is expected to produce up to 1.1 billion cubic feet per day of gas, as well as 57,000 barrels per day (BBL/d) of condensate. It is part of the broader Alaska LNG development. Subscribers can learn more from a detailed project report.

Subscribers to Industrial Info's GMI Project and Plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of detailed reports for U.S. natural gas-processing projects that are set to begin construction in the first quarter.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).