Summit Midstream Partners, LP (NYSE: SMLP) announced today the successful commissioning of its new 60 MMcf/d cryogenic processing plant in the DJ Basin.

refinery-3613522_960_720

Image: SMLP announces start-up of DJ Basin processing plant. Photo: courtesy of Markus Naujoks from Pixabay.

The new facility, which substantially increases SMLP’s prior processing capacity in the DJ Basin, delivers residue gas to Colorado Interstate Gas and Trailblazer Pipeline and processed NGLs to the Overland Pass Pipeline.  In addition, SMLP expects the new plant to operate more efficiently and to generate substantially higher NGL recoveries compared to SMLP’s legacy 20 MMcf/d processing facility.

Volumes at this new plant are expected to ramp considerably throughout the balance of 2019 based on existing production behind our system and new production associated with our customers’ drilling and completion schedules.  SMLP’s capital investment in the new processing plant was underpinned with monthly demand payments from certain of our customers, and the commissioning of the plant enables SMLP to earn those monthly demand fees, beginning in the third quarter of 2019.  SMLP estimates that the new facility will enable annualized DJ Basin segment adjusted EBITDA for the second half of 2019 to more than triple the $7.6 million of DJ Basin segment adjusted EBITDA reported in all of 2018.

Leonard Mallett, interim President and Chief Executive Officer, commented, “Today’s announcement represents a key milestone for SMLP and creates significant scale for us in one of our core growth basins.  This new infrastructure provides our customers with a much-needed outlet for the rapidly growing associated natural gas production in this rural part of northern Weld County, which we expect will create additional expansion opportunities for SMLP in the future.  Additionally, the high margin free cash flow generated by the new facility will further strengthen our balance sheet.”

Source: Company Press Release