Verde, Diamondback partnership lets contract for proposed Permian GTG plant

Verde Clean Fuels Inc., Houston, has let a contract to Chemex Global LLC to deliver front-end engineering and design (FEED) for the operator’s proposed development, construction, and operation of a first-of-its-kind natural gas-to-gasoline (GTG) plant in Martin County, Tex., in Midland basin of the Permian.

Chemex’s selection as FEED contract marks the first step on the pathway forward to furthering Verde’s plan with partner Midland-based Diamondback Energy Inc. subsidiary Cottonmouth Ventures LLC for joint development of the GTG plant, that will use Verde’s proprietary synthesis gas (syngas)-to-gasoline plus (STG+) liquid fuels technology to process a feedstock of stranded or otherwise-flared associated natural gas from Diamondback’s Permian basin operations for commercial-scale production of about 3,000 b/d of fully finished gasoline, the operator said on June 4.

Scheduled to begin immediately for anticipated completion in early 2025, Chemex’s delivery of the FEED study will enable the parties to reach final investment decision (FID) on the project that—if approved—will lead into selection of a contractor to provide engineering, procurement, and construction (EPC) services for the plant, Verde said.

Should Verde and Cottonmouth take positive FID, based on the current timetable, construction on the Midland County GTG plant could be completed in 2027, according to the operator.

Intended to become the first project under a joint development agreement signed in February 2024 between Verde and Cottonmouth, the proposed Midland County GTG plant—in addition to maximizing value and reducing emissions of flared and stranded Permian natural gas volumes—would serve as a model for future GTG plants in the US and abroad.

“With the potential to mitigate the flaring of up to 34 MMcfd of natural gas per day, this proposed project could serve as a template for additional natural [GTG] projects throughout the Permian basin and other pipeline-constrained basins in the US, as well as addressing flared or stranded natural gas opportunities internationally,” said Ernie Miller, Verde’s chief executive officer.

For a more in-depth look at the proposed project, see OGJ’s exclusive feature on the Midland County GTG plant in the June-July issue.