Wyoming Oil & Gas Infrastructure Projects Total Nearly $1 Billion

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Crestwood Midstream Partners LP (NYSE:CMLP) (Houston, Texas) has a short corporate history, but big plans and deep pockets: Already active as a gas gatherer and processor in the Marcellus and Barnett shales, Crestwood also plans to develop greenfield infrastructure projects in the emerging rich-gas or crude oil-based shale formations, like the Bakken, Niobrara and Utica shales.

Towards that end, Crestwood representatives recently met with elected officials in Converse County, Wyoming, to outline plans to invest up to $300 million to build two grassroot gas-processing plants near Douglas, Wyoming. The proposed plants would process natural gas extracted from the Wyoming side of the Niobrara Shale formation.

Crestwood's first proposed processing plant, representing an investment of $100 million, is still in the permitting phase, but construction is expected to begin by late 2013, according to an article in the Douglas Budget newspaper. That plant expects to begin operating by mid-2014, assuming all permits are received by later this year. Once operating, the plant will be able to process up to 100 million cubic feet of gas per day (Mmcf/d). After natural gas liquids (NGLs) like ethane, propane and butane are separated from the gas stream, the processed gas will be shipped via an existing interstate pipeline. The NGLs will be transported from the plant by truck, the newspaper reported.

The second, larger, processing plant will cost an estimated $200 million--large enough that Crestwood will have to obtain the blessing of the Wyoming Industrial Siting Council. If all required permits are received, the second plant, also located near Douglas, Wyoming, could be operating by mid-2015.

Crestwood's plans are part of a broader trend of increased investment in Wyoming's oil & gas infrastructure, including gas-processing facilities and pipelines. Industrial Info is tracking 22 active Oil & Gas infrastructure projects in the Cowboy State, with total investment value (TIV) of $681 million. That figure does not include the two Crestwood projects, which would bring the total to about $1 billion.

Click on the icon at right for a snapshot of active oil & gas projects under development in Wyoming.

Some of Wyoming's larger oil & gas infrastructure projects being tracked by Industrial Info include:

• Guernsey Pony Express, a $337 million natural gas-to-crude oil pipeline conversion project. It is scheduled to kick off this summer and be operational by late 2014.
• Riley Ridge grassroot natural gas processing plant, a $100 million project that is under construction. It is scheduled to come online later this year.
• Casper grassroot crude oil unit train loading terminal, a $60 million project scheduled to kick off later this year and be completed by the end of 2013.
• Blacks Fork II natural gas processing complex fractionator plant addition, a $45 million project that kicked off last year and is nearly complete.
• Blacks Fork III natural gas processing complex fractionator plant addition, another $45 million project that is scheduled to kick off near the end of 2015 and begin operating in mid-2015.

Last month, Crestwood announced it will spend about $108 million to buy a 50% interest in Jackalope Gas Gathering Services LLC (Oklahoma City, Oklahoma), which operates the Jackalope gas gathering and processing system in Converse County, Wyoming. In announcing the transaction, Crestwood said it would give it an "early-stage entrance into the emerging Powder River Basin Niobrara Shale play and position it for significant future infrastructure development opportunities across the rich-gas and crude-oil midstream value chain."

"Wyoming is a large energy producing state, mostly known for its Power River Basin coal deposits, but our research shows there's plenty of Oil & Gas project activity in that state as well," said Jesus Davis, Industrial Info's vice president of research for the Oil & Gas Production, Transmission and Terminals industries. "We don't expect all of these projects to move forward according to their announced schedules. But the level of planned oil & gas projects in Wyoming indicates the state is actively working to broaden its energy economy."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.