FORT WORTH, Texas—Production in the Permian Basin is set to soar in 2014, according to the Texas Railroad Commission. In January and February of this year, the basin produced 3,196 million cubic feet per day (MMcf/d) of gas compared to 3,290 MMcf/d of total gas production for 2013.

Prism Midstream LLC is building a cryogenic plant in hopes of serving the growing needs of the Permian Basin. The company’s founder and president, Bob Dunn, announced at Hart Energy’s DUG Midstream conference on May 20 that construction is underway for the Bedrock Gathering Plant in Crocket County, Texas.

“Everything we’re doing is designed to make the system more reliable for the producers,” Dunn said.

Set to open in mid-2015, the high-efficiency plant will have a nitrogen rejection unit (NRU) and ethane rejection capabilities that will help reduce fuel use and maximize producer returns. The plant will initially have the capability of 120 MMcf/d, but will have the capability for expansion.

“We’re building a backbone for a 240 MMcf/d plant so we can quickly expand,” Dunn said.

Additionally, the plant will have high ethane recovery, ethane rejection, amine treating and nitrogen-rejection capabilities. Dunn said the company is proud of how far it has come with the NRU. The NRU is a second-generation design by Valerus and is a good fit for the plant, he said.

The nitrogen “concentrator” is designed to handle up to 6% blended nitrogen content. It produces a concentrated stream of nitrogen to feed the NRU. As a result, less gas will be required to be recompressed from lower pressures.

“We’ll run less than a quarter of the gas going through the NRU and save on recompression fuel,” he said. “It will be a more efficient, less-expensive operation.”

The gathering system of the plant will have 50-gauge per square inch compressor suction, intermediate pressure system and fuel and gas-lift return lines. The intermediate pressure is important because, compared to higher-pressure systems, it will save people money in the winter, Dunn said.

“This past winter, when things hit 20 degrees, people learned how hard it could be to deal with high-pressure systems in such a hydrate formation,” he said.

The initial residue outlet will be at the Kinder Morgan West Texas Pipeline. The West Texas Pipeline extends from the Denver City Hub 127 miles south to Reeves County. It has the capacity of about 100 MMcf/d. Trinity Pipeline LP owns and operates the pipeline.

Prism plans to build a second residue outlet to the ETC Oasis Pipeline. The Oasis pipeline is a natural gas pipeline system extending 600 miles across Texas from the WAHA Hub, located in West Texas, to the Texas Gulf Coast Katy Hub just west of Houston. This system has a transportation capacity of 1 billion cubic feet of natural gas per day (Bcf/d).

When the Bedrock Plant opens it will connect to two of the three NGL outlets serving the Permian Basin, Dunn said.

Prism plans to use its experience in handling off-specification materials such as condensate, high API gravity material and East Texas NGLs in its Permian project.

“We think there’s a good market in West Texas to handle off-spec material,” he said.

Dunn and Gene Adams founded Bedford, Texas-based Prism Midstream in 2012 with Energy Spectrum Partners VI. The pair previously founded Prism Gas Systems as a midstream acquisition company in 2002. The company was sold to Martin Midstream Partners LP (NASDAQ: MMLP) in 2005. Seven years later, the company was sold to CenterPoint Energy Field Services for $273 million.

With their new venture, the pair chose to focus on providing infrastructure solutions for emerging resource plays. While the company was initially focused in East Texas, they now have interests in two Texas Gulf Coast natural gas gathering systems. Dunn and Adams also own a piece of Pecos Valley Producer Services LLC located in Reeves County, Texas. The company is jointly owned by an affiliate of Kinder Morgan Energy Partners LP.

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