Salt Creek Orders Long-Lead Gear for 300-MMcfd Pecos IV Gas Plant

Up to 300 MMcfd of new cryogenic gas processing capacity is on the table at Salt Creek Midstream's Pecos complex in Reeves County, Tex., where the operator ordered long-lead equipment on Nov. 11 ahead of a final investment decision by yearend 2026.

If sanctioned, the Pecos IV train would enter service in the second half of 2028 and could lift Salt Creek's installed Permian processing capacity to as much as 900 MMcfd. The Pecos site itself is designed to expand to 1.2 bcfd from its current 600 MMcfd, and the company says it has already secured grid power to support that potential buildout.

The numbers explain the hurry: Salt Creek expects volumes across its Delaware basin system to exceed the existing 600-MMcfd processing ceiling in the first half of 2027. Customer and volume growth drove the whole plan, the company said in its release.

What bridges the gap before Pecos IV?

Until new trains arrive, Salt Creek has lined up firm offloading contracts as a bridge. Those offloads enter service by the end of the first quarter of 2027 — timed, in other words, to catch the system right as it fills.

The physical build-out is already moving. The company recently finished a 13-mile, 20-in. pipeline loop along its eastern trunkline system, boosting available high-pressure gathering capacity out of Lea, Winkler, and Loving Counties, Tex., by as much as 40%.

For 2027, Salt Creek plans to add:

• 80 MMcfd of compression-station capacity
• 20,000 hp of company-owned low-pressure gathering compression

Counting those additions, the operator would run about 80,000 hp of owned low-pressure gathering compression across 20 compressor-station sites.

How strong is the acreage behind it?

Nearly 300,000 dedicated acres now sit behind the system across the Permian's eight core counties, spread across more than 20 unidentified customers after additional commitments signed earlier this year. That's the contract foundation the processing bets rest on.

Quality matters as much as quantity here. Salt Creek expects about 75% of anticipated 2027 throughput to come from investment-grade counterparties, with customer volume commitments covering roughly 35% of projected volumes.

The acreage includes about 40,000 dedicated acres in the liquids-rich core of the Woodford fairway, plus exposure to prospective areas. Salt Creek estimates Woodford volumes will exceed 200 MMcfd by yearend 2027, based on more than 600 future well locations in the play.

Where does the money come from?

The capital picture has been reshaped. Salt Creek completed a $980-million first-lien term loan due 2031, using net proceeds to repay existing first- and second-lien term loans due 2027. It also entered a $35-million super-priority revolving credit facility due 2031 — undrawn at close, with a $40-million accordion feature.

Financial support would also presumably come from the August sale of the company's crude gathering business to Enbridge Inc. for $600 million. Under that deal, Enbridge acquires 100% interests in the Orla and Wink North systems and a 50% interest in Delaware Crossing.

The package is substantial:

• About 500 miles of Delaware basin gathering infrastructure
• Combined throughput capacity of 420,000 b/d
• Storage capacity of 350,000 bbl
• More than 20 producers served
• About 320,000 net dedicated acres under long-term agreements
• Average remaining contract life of roughly 10 years

The parties say the transaction remains scheduled to close later this year, subject to customary closing conditions.

What to watch

The near-term markers are firm: offload capacity online by end of first-quarter 2027, the system's volumes surpassing 600 MMcfd of processing in first-half 2027, and compression additions through the year. The big one sits at the end of 2026 — Salt Creek's final investment decision on Pecos IV, which sets the clock on that 300 MMcfd and the 2028 startup behind it.