Southern Union Plans to Increase Production by Expanding Natural Gas Processing Plant in New Mexico

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Researched by Industrial Info Resources (Sugar Land, Texas)--Southern Union Gas Services (Houston, Texas) a subsidiary of Southern Union Company (NYSE:SUG) (Fort Worth, Texas), is planning to invest approximately $35 million to increase the processing capacity of its Jal #3 natural gas plant near Jal, New Mexico. Southern Union intends to increase the processing capacity of the plant from its current 103 million-105 million cubic feet per day (mmcfd) of natural gas to approximately 200 mmscfd in 2008.

The Jal #3 plant is composed of a single operational cryogenic unit with a design capacity of 80 mmcfd (running over 100 mmcfd) and a non-operational lean oil plant with a capacity of 150 mmscfd that was shuttered back in 1993. The Jal #3 facility presently has an NGL production capacity of approximately 360,000 gallons per day. Southern Union plans to incorporate a usable portion of the shuttered lean oil plant to add treating capacity, as well as add acid gas injection capability to increase compression facilities to enable the facility to take the gas at a higher pressure and correct a bottleneck in its sulfur recovery unit, which is only able to function at the rate of 20-22 tons per day. Southern is also looking at adding a 600-gallon-per-minute amine unit at the facility.

Southern Union Gas Services is currently awaiting its permits for the expansion and expects to receive permit approvals in the first quarter of 2008. Construction is expected to begin on the expansion project in February or March of 2008 with a completion date targeted for the late third or early fourth quarter of 2008.

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