Northwind Midstream Partners has announced the completion of the issuance of a $700m senior secured first lien term loan.
The company plans to use the proceeds from the term loan to refinance debt and expand its gas gathering, compression, treating, sequestration and processing system in Lea County, New Mexico, US.
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EOC Partners led the term loan, with participation from Sixth Street, Stonepeak Credit, Mercuria Energy America and Main Street Capital.
Northwind CFO Tyler Buckingham said: “This financing will help us meet the increasing needs of our upstream producer partners through the expansion of our facilities, positioning Northwind to capitalise on future growth in the Delaware Basin.”
Northwind’s facilities address a “critical” challenge in Lea County, where upstream development in the Northern Delaware Basin has been limited due to insufficient capacity for sour natural gas treating, acid-gas injection and sequestration.
Industry estimates indicate that more than 7,500 well locations and at least six geologic production benches remain available for development in the region.
EOC Partners managing partner Richard Punches noted: “Lea County has a robust inventory of highly economic drilling locations, but activity has been constrained due to the need to treat off-spec gas. We believe Northwind’s asset base and strong management team will be key to unlocking this value.”
Northwind’s current assets include 150 million cubic feet per day (mcf/d) of amine treating capacity and two acid-gas injection wells for carbon sequestration.
The network also includes more than 200 miles of pipelines and five compressor stations with a combined compression of 41,750hp.
The company is currently expanding the Titan Treating Complex from 150mcf/d to 400mcf/d, with completion expected by 2026.
Additionally, Northwind is building the 75mcf/d Pelham Treating Complex in Northern Lea County.
Five Point Energy CEO and managing partner David Capobianco said: “The market’s enthusiasm for Northwind’s term loan reflects the significant opportunity presented by the company’s platform in Lea County and validates our core business model of providing off-spec gas solutions to top producers across the Northern Delaware Basin.”
