Kinetik Boosts Delaware Basin Gas Processing Capacity and Secures Long-Term Agreement
Kinetik has agreed to acquire Durango Permian LLC for $765 million in cash and equity. Durango's assets in Eddy, Lea, and Chaves counties, NM, include 2,400 miles of gas pipelines and 220 MMcfd of processing capacity, as seen in the newly added TGS pipeline dataset provided by MAPSearch. Additionally, Durango is constructing Kings Landing, a 200 MMcfd processing complex in Eddy County, expected to be completed by April 2025. Kinetik anticipates an additional $78 million in capital expenditures to finish Kings Landing.
This acquisition enhances Kinetik’s processing capacity by 420 MMcfd, doubles its gathering pipeline mileage, and broadens its customer base by over 60. According to TGS Well Data, approximately 150 active public and private E&P companies are operating in the area, producing about 470 MMcfd of gas in total.
Figure 1 illustrates the geographical coverage of Durango’s pipelines and highlights the surrounding active producing wells, using the TGS Well Data Analytics application.
Figure 1. TGS Well Data Analytics application showing the geographical coverage of Durango’s pipelines and highlights the surrounding active producing wells, colored by the top 10 operators.
Kinetik secured a 15-year gas gathering and processing agreement with a major customer in Eddy County, bolstering its position in New Mexico's Delaware Basin. These transactions grant Kinetik access to lucrative areas and reaffirm their status as a key midstream player in the region (Figure 2).
Figure 2. Kinetik Strategic Transaction Presentation: Kinetik and Durango Delaware Basin pipeline coverage, including Processing Facilities and Markets.
Kinetik President and CEO Jamie Welch stated, "After acquiring Durango and completing Kings Landing, Kinetik will manage more than 2.4 billion cubic feet per day of processing capacity, solely in the Delaware Basin, and approximately 4,600 miles of pipelines across eight counties." The transaction is scheduled to close in Q2 2024, subject to standard closing conditions.
Leveraging TGS Well Data Analytics enables swift comparative analysis and evaluation. For further details on Well Data Analytics or to schedule a demo, please contact us at WDPSales@tgs.com.
