Battalion, Caracara to develop acid-gas treatment infrastructure
Battalion Oil Corp., Houston, through a subsidiary, will develop acid-gas treatment and carbon-sequestration infrastructure in Winkler County, Tex. through a joint venture with Caracara Services LLC, the companies said in separate releases May 16.
The JV, Brazos Amine Treater LLC (BAT), has entered a gas-treating agreement with certain of Battalion’s subsidiaries for gas production from the Delaware basin-focused operator’s Monument Draw area.
The infrastructure—which could be operational early 2023, said Battalion Chief Executive Officer Richard Little—will be developed and operated by BAT and will utilize a new, centralized amine treating train supported by an acid gas injector well (Hutchings-Sealy #4), which is currently drilled and completed to a total depth of 18,250 ft and permitted for acid gas injection.
The project—expected to have an initial capacity of 30 MMcfd as part of Phase 1—is designed to treat natural gas for carbon dioxide (CO2) and hydrogen sulfide (H2S) with combined concentrations up to 10%. After treating, the infrastructure will deliver sweet gas back to Battalion who will redeliver to dedicated third-party midstream providers.
At initial capacity, the project is expected to fully capture and sequester more than 50,000 tonnes/year (tpy) of H2S and CO2. Capacity for a potential Phase 2 could be up to 50 MMcfd through expansion of the initial infrastructure with additional growth opportunities through a second permitted acid gas injector well controlled by Battalion, the company said.
Caracara, which constructs, owns, and operates carbon capture, utilization, and sequestration (CCUS) infrastructure, will provide all remaining capital for construction of the BAT infrastructure and associated infrastructure. Battalion contributed a wellbore with an approved permit for injection and surface land with road access rights. Battalion will workover the AGI well prior to in-service. In exchange for its contribution, Battalion retained a 5% equity interest in the joint venture.
