The joint venture between Riley Exploration Permian and Conduit Power captures natural gas that would otherwise be flared to power Riley Permian's operations in Texas, reducing the producer's carbon emissions. (Source: Shutterstock)
Riley Exploration Permian Inc. and Conduit Power LLC, a portfolio company of Grey Rock Investment Partners, announced on March 2 that they will form a joint venture (JV) to own and operate on-site power generation for the E&P.
Utilizing captured flared natural gas, the project will power Riley Permian's operations in Yoakum County, Texas, according to a March 2 press release.
The project will be completed in phases and will ultimately include 20 megawatts (MW) of power. Phase 1 of the project will provide 10 MW of on-site generation and is expected to be operational by June 2023, with an additional 10 MW in Phase 2 anticipated to be operational by late 2023 or early 2024.
The Oklahoma City-based E&P said the JV will address unreliable power in the field, which can lead to lost revenue from production downtime as well as costly repairs. Riley Permian expects the project to improve its operating resiliency with a consistent, baseload power source in an increasingly intermittent power grid.
Riley Permian also said the JV vertically integrates its power needs with a “behind-the-meter solution” that will allow it to better manage long-term energy costs. And because the project uses Riley Permian natural gas that would otherwise be flared, it allows the producer to reduce its CO2 emissions.
Bobby Riley, CEO of Riley Permian, said the company sought Conduit as a partner based on their expertise.
“Their team's depth of experience offered us a turnkey solution, including design, procurement, build and implementation,” he said. “We believe this project is indicative of the types of creative initiatives we pursue as a company, including those that enable higher operational control and situations that turn challenges into opportunities.”
Conduit Managing Director Matt Whitaker said the company’s customers benefit from controlling critical infrastructure, such as electric power, as a means to improving costs and operational efficiency.
“At Conduit, we provide a total power solution that enables our customers to increase reliability, lower power costs and reduce carbon emissions," he said.
Kirkland & Ellis served as legal adviser for Riley Permian and Locke Lorde served as legal adviser for Conduit.
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