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Penntex North Louisiana, LLC: Midstream Service Provider Opens Two New Facilities to Process Natural Gas

Posted May 1, 2015 in Case Studies

Project Profile

Two Natural Gas Processing Plants in Lincoln Parish, Louisiana:

In 2014, PennTex Midstream Partners, headquartered in Houston, Texas, formed North Louisiana LLC (PennTex NLA) as a strategic joint venture between PennTex and natural gas producers in North Louisiana to support growing production from partners and other producers in the area. Midstream services will include treating, gathering, processing and transmission of natural gas. The new plants in Lincoln Parish will remove natural gas liquids and deliver the residue gas to the intrastate and interstate pipeline systems.

Business Challenge

On Feb. 26, 2014, Entergy’s business development team met with PennTex NLA representatives, who had a formidable request: For a new natural gas processing plant, they would need electric power for large motors, a substation and transmission lines – all operational in less than 11 months. This was a non-negotiable deadline.

“We estimated the project would take more than 18 months to build using normal processes,” said Charles Igoubadia, Entergy’s senior project manager. “Our challenge was to expedite the work without sacrificing quality.”

An added challenge surfaced with PennTex NLA’s decision to use electric rather than gas motors at the plant: The electricity requirement of 25 megawatts would be much higher than specified in the original design. With this added load, additional tariff options had to be developed in order for electricity to be more economical than gas.

Collaborating with Entergy

Meeting this extraordinary challenge would take an extraordinary team. From Entergy’s construction and project management ranks, a handpicked team of nine key members were chosen for the job.

The engagement of PennTex NLA ocials was crucial to the project’s success. In their partnership role, they maintained constant, transparent communication, including weekly construction calls with the Entergy team and other PennTex NLA vendors. These calls allowed the team to resolve all issues in a timely manner.

This project called for creative solutions: PennTex NLA agreed to take on some of the right-of-way acquisition for the project. The company also emphasized to its other vendors, including surveyors and soil borers, that they should work closely with Entergy to avoid duplication of effort and achieve efficiencies.

Next, the Entergy team decided to overlap construction processes wherever possible: Before scoping was complete, design had begun. Before design was complete, construction had begun. Working these parallel project paths involved taking measured risks.

Serving PennTex NLA also required creative equipment solutions. Some specialized transmission equipment can only be ordered when the design is almost complete and can take up to 36 weeks to deliver. This was time the Entergy team didn’t have. To remain on schedule, they worked with vendors to expedite the necessary items. In some cases, they reassigned equipment slated for different projects if ordering replacements could be done without compromising their construction schedules.

Local distribution crews with the Arcadia network pitched in, too, and worked through the Christmas holiday to make sure PennTex NLA’s critical pipeline valve sites had service by the deadline.

Business Solution

All natural gas plants have the option to install gas engines or electric motors for their compressors. Historically, gas engines have had better economics and were faster to install; however, Entergy was able to use the Natural Gas Pipeline Compressor Tariff to improve the economics and complete the facilities on time.

As a result of tightly coordinated efforts by a cross-functional team working closely with PennTex NLA and vendors, we energized the substation and high lines in December, three months ahead of schedule. Careful cost management resulted in actual project costs within 14 percent of the originally budgeted dollars.

On March 11, 2015, Entergy and PennTex employees celebrated their joint achievement at a ribbon-cutting ceremony for the new Arcadia plant.

In November 2014, PennTex signed a contract for a second phase of the project, the Ruston plant, which will be built adjacent to Entergy’s Mount Olive substation near Ruston, Louisiana. This second phase will result in an additional 28 megawatts of load for Entergy and a continued relationship between the two companies. Both projects combined will bring 30 new jobs to the area and a capital expenditure of $150 million.

Key Industries

Energy Services & Manufacturing