Pinnacle Midstream II Initiates Phase II of Dos Picos Platform

Source: 7/21/2021, Location: North America

- Finalizes development of a processing and nitrogen rejection facility which will have a total capacity of 200 million cubic feet per day upon completion and extend the Company’s growing services franchise in the Midland Basin; facility is anticipated to be fully operational during the second quarter of 2022
- Evaluating a novel, fully integrated solar facility to supplement electrical power needs throughout the processing facility and support the Company’s long-term commitment to reducing greenhouse gas emissions
- Anchoring the project is a long-term acreage dedication with one of the largest and most active acreage holders in the Midland Basin

Pinnacle Midstream II LLC, an independent energy infrastructure company, announced the initiation of Phase II development of the Dos Picos System with the construction of a natural gas processing facility – totaling 200 million cubic feet per day (MMcf/d) upon completion – in the Midland Basin. The project is targeted for commercial operation during the second quarter of 2022.

The Dos Picos Plant, located in Midland County, will complement Pinnacle’s existing high pressure, large diameter gathering and compression facilities that commenced operations during the first quarter of 2021. The project will provide access to the most competitive downstream markets, maximize netback and optionality for Pinnacle’s customers, and be equipped with an integrated Nitrogen Rejection Unit (“NRU”). The system will be readily expandable based upon continued customer demand.

Pinnacle remains committed to its environmental stewardship, prioritizing the responsible use and protection of the natural environment surrounding the Company’s assets. A supporting initiative is the Company’s ongoing evaluation to develop a fully integrated solar facility adjacent to the Dos Picos Plant to supplement electrical power needs with renewable energy to reduce the carbon intensity of the system. This low-impact solution should reduce direct greenhouse gas emissions for Pinnacle as well as indirect (Scope 2) emissions for its growing customer base. Furthermore, Pinnacle intends to deploy low-impact energy sources where applicable across its asset portfolio. The Dos Picos project itself will play a pivotal role in continuing to reduce the flare intensities across the Permian Basin and further aid in the reduction of our customers’ overall carbon footprints.

“This is an exciting milestone in the growth of Pinnacle’s infrastructure platform and will enable the Company to extend its natural gas services franchise across one of the most active oil and gas producing regions in North America,” said J. Greg Sargent, Chief Executive Officer at Pinnacle. “Our continued investment in the Dos Picos asset will enable us to better service our customers and help them benefit from an improving commodities environment while continuing to maximize recoveries and limit flaring across the Basin. We expect the Phase II project to support economic development and create jobs in the Midland, Martin and Glasscock counties area.”

Pinnacle’s midstream infrastructure is anchored by long-term acreage dedications with top-tier, investment-grade Permian operators currently continuing full-scale, multi-pad development. The Company’s facilities were designed to support high intensity pad development, which is anticipated to accelerate throughout 2021 and beyond.

“With the increasing development of multi-well pads and higher production rates in the Midland Basin, we want to ensure our current and future customers will continue to receive reliable flow assurance as well as access to the best commercial markets,” said Drew Ward, Chief Commercial Officer at Pinnacle. “This further emphasizes the opportunistic and critical importance of our strategically-located platform.”

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