Producers Midstream to Convert Permian Pipeline for Interstate Gas Service
Producers Midstream II plans to convert its Palo Duro Pipeline into an interstate system to move Permian gas to Midcontinent markets, targeting demand from data centers, petrochemicals, and power generators.
(P&GJ) — Producers Midstream II is moving forward with plans to convert an existing natural gas pipeline in Texas from intrastate to interstate service, according to a recent report from East Daley Analytics.
The company held a binding open season from June 30 to July 14 for its Palo Duro Pipeline project, which would transport natural gas northbound from the Permian Basin to Midcontinent markets. The pipeline would operate under Federal Energy Regulatory Commission (FERC) oversight once reclassified.
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Producers Midstream plans to convert an existing 275-mile, 16-inch pipeline running from Nolan County to Wheeler County, Texas. The system would connect with the company’s existing residue header infrastructure in Wheeler County, linking to major interstate pipelines including Northern Natural Gas, Southern Star, ANR, NGPL, Panhandle Eastern, Enable Gas Transmission, and Transwestern, as well as regional intrastate networks.
The project targets growing demand from data centers, petrochemical facilities, power generation, and other industrial sectors. According to East Daley Analytics, the pipeline will have a design capacity of 80 MMcf/d and will be supported by one compressor station and up to 12 meter stations. If fully dedicated to data center use, the project could support between 125–150 MW of total load.
No new pipeline construction is planned for the conversion. Instead, the company intends to use existing infrastructure and lease capacity on its header system to connect the Waha hub with the Anadarko Basin.
Pipeline takeaway capacity has long been a challenge for Permian producers, and converting the Palo Duro Pipeline could help alleviate some of the constraints at Waha by expanding downstream market access, East Daley noted.