Permian Basin oil and gas support systems on the rise

Another sign the oil and gas industry is not slowing down in the New Mexico Permian Basin are the new power sources coming online this year and next year. Due to the size and growth in the area additional sources and power lines are expected to come online in 2020. Investing heavily in the support of local oil and gas exploration and production companies are Xcel Energy with a new wind farm, substations and distribution lines. This project represents a $3 billion investment in the company’s transmission expansion to support the need for power in the area. Despite rumbles on the slow down in the Permian Basin, it’s obvious by the amount of support systems coming online that the area is far from at it’s peak.

Last week an article about companies planning to utilize the unusable water from local water treatment plants, now we have more planned wind farms generating power.. a few months ago I shared a story about solar power generation being used by some oil and gas producers.

There is still a serious amount of investment going into this area and it doesn’t look like it’s slowing down. As I have said previously in other posts this area of New Mexico may be restructuring , companies may be reformulating for better productivity and changing their strategy and investment, but this area is still a big producer and will continue as such for some time. As one of the top 3 US fields; with what appears to be some very lucrative undiscovered areas, specially in the conventional drilling field which has been relatively quiet in the area whilst the shale boom took precedence. I expect to see conventional drilling programs make a play here more and more.
The article below from the Carlsbad Current-Argus shares some insight into the coming year and investment in the Permian Basin.

It will include 240 wind turbines, with a new 14-mile transmission line to connect wind energy to the local power grid.

The company invested $900 million in the facility, employing more than 300 workers and providing enough electricity to power about 194,000 homes annually and bring up to $131.5 million in state and local benefits over the life of the project, the release read

Permian Basin electrical grid continues to grow amid oil and gas boom

Adrian Hedden, Carlsbad Current-Argus Dec. 13, 2019

A photo of a wind farm owned by Xcel Energy in Plainview, Texas.

A photo of a wind farm owned by Xcel Energy in Plainview, Texas. (Photo: Xcel Energy)

A boom in oil and gas production in the Permian Basin of southeast New Mexico and West Texas is driving the need for additional electrical capacity to power extraction facilities.

A primary electricity provider in Permian expected to put a wind farm in Roosevelt County online next year, as construction began on additional transmission lines and added electrical grid capacity throughout the region.

Xcel Energy announced the Sagamore Wind Project would be ready for operation by the end 2020, a 522-megawatt wind farm to be built near the community of Dora, read an Xcel news release.

It will include 240 wind turbines, with a new 14-mile transmission line to connect wind energy to the local power grid.

The company invested $900 million in the facility, employing more than 300 workers and providing enough electricity to power about 194,000 homes annually and bring up to $131.5 million in state and local benefits over the life of the project, the release read

Constructed also began this month on the new, 34-mile, 345-kilovolt Eddy-Kiowa transmission line in Eddy County, with Xcel investing about $65 million in that project intended to create additional capacity for future electrical local growth, the release read, driven mostly by oil and gas expansion.

Xcel is also working to complete 200 miles of new transmission and distribution lines in the region, including the last segment of a 245-mile high-voltage transmission corridor between the TUCO Substation north of Lubbock, Texas to the Yoakum County substation near Denver City.

More: Xcel Energy’s eastern New Mexico wind farm going into service in 2020

That line will connect with a 345-kilovolt line completed this year between Hobbs and the China Draw Substation southeast of Carlsbad.

“The purpose of the new line is to boost the power delivery capabilities of our transmission grid on the Texas South Plains and in southeastern New Mexico,” said Xcel spokesman Wes Reeves in a statement.

Throughout the region, Xcel expected to build about 100 miles of new transmission lines in 2020, and another 300 miles of distribution lines.

More: Xcel continues to expand power grid in Permian Basin Region

This year, the company constructed about 100 miles of transmission and distribution lines each, read the release.

President of Xcel’s Texas and New Mexico operations David Hudson said the projects were intended to grow the area’s electrical capacity, while adding construction jobs for locals.

“We are committed to our customers and finding affordable options to utilize our industry leading capabilities to make smart investments for future growth,” said David Hudson, president of Xcel’s New Mexico and Texas operations. “These projects are important for creating construction jobs and fueling future job creation for the region.”

Oil and gas production continued to be a main contributor to the need for added capacity, Reeves said.

More: Xcel vows to cut carbon emissions, reduce by 80 percent in 2030

Records show more than 300 million barrels of oil were produced in New Mexico this year, leading the state to be the third-largest producer of crude behind Texas and North Dakota.

Spokesman for the New Mexico Oil and Gas Association Robert McEntyre said the industry expects the growth to continue, meaning more power will be needed to fuel extraction operations.

“We don’t foresee the growth in the oil and gas industry slowing down here anytime soon,” he said. “The industry is important for tax revenue for state and local government, and we couldn’t do it without electricity. That’s why Xcel Energy’s investment in the electric grid is important.”

More: Could New Mexico be carbon-free by 2045?

The projects are part of Xcel’s “Power to the Plains” initiative to grow its electrical capacity in the region. Since 2011, Xcel invested in more than 1,300 miles of transmission lines in New Mexico, Texas and Oklahoma while building or updating 75 substations.  

Another 200 miles was planned to be constructed through 2021, with 11 more substations to be built or upgraded, representing a $3 billion investment in the company’s transmission expansion.

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