The project (phase 1), which is located in Eddy county, New Mexico, has been established to support the drilling efforts of Legend Production Holdings subsidiary Legend Natural Gas III.
Phase 2 of the project will comprise construction of a cryogenic natural gas processing facility with a capacity of 20 million cubic ft per day and additional gathering pipelines across the area to support Legend’s 2014 and 2015 drilling program, as part of the latest deal.
Phase 2 is slated to be completed in the third quarter 2014, which is estimated to cost between $25m to $30m.
Crestwood plans to further expand the Willow Lake gathering system as Phase 3 to install a second gas processing plant with an expected capacity of around 120 MMcf/d, upon completion of the Willow Lake plant.
Crestwood’s general partner president and CEO Robert Phillips said the project expands company’s footprint around the Las Animas system and further establishes an early-mover position in an underserved area of the Delaware basin.
"We are pleased to announce the expansion of Crestwood’s Willow Lake System which represents an important step in the three-phase build out of a large scale green field gas gathering and processing system within the Delaware Basin, one of the fastest growing oil and liquids-rich gas plays in the country," Phillips added.
