Eddy County moved forward in a $300 million industrial revenue process for a Houston-area company to build a natural gas processing plant near Carlsbad.
Eddy County’s Board of County Commissioners approved a declaration of intent with Frontier Field Service LLC for the Kings Landing Project processing plant 27 miles northeast of Carlsbad in an unincorporated area of Eddy County, according to a memo written to commissioners from Eddy County Manager Allen Davis
He said industrial revenue bonds (IRBs) provide property taxes, gross receipts taxes and compensating tax exemptions to defray part or all of the costs which could encourage economic development in Eddy County.
More:Long-term industrial bond issued by Eddy County to energy company discharged early
Davis said in return for tax exemptions, Frontier Field Service would agree to an annual payment in lieu of taxes (PILT).
Paul Gessing, president of the Albuquerque-based Rio Grande Foundation, said IRBs were a significant sales point for a company like Frontier Field Service.
“That’s obviously the goal to use these kind of tax benefits to help bring businesses in that will make capital investments to stay,” he said.
“For these local governments that are trying to make themselves attractive to businesses that are looking at coming here it’s hard because New Mexico’s taxation, regulatory and work force problems are notable and well known,” Gessing said.
Frontier Field Services is an affiliate of Durango Midstream based in The Woodlands, Texas near Houston said Richard Cargile, president and chief executive officer (CEO).
Durango Midstream is a natural gas gathering, processing and marketing company providing midstream services to oil and gas producers in Kansas and New Mexico, the company’s website stated.
“New Mexico is actually our growth area and so we are getting full with our capacity. We have doubled our gathering and processing in New Mexico over the last two years and we’ve expanded our employee base by about 68 percent,” Cargile said during a bond pitch to county commissioners Nov. 1.
More:$3.5B Permian Basin natural gas merger marks high growth expected in the region
He said the Kings Landing Project could generate 21 new jobs in Eddy County.
“This is a real asset for these operators in this part of the state,” said Davis. “Lots of positives for having Frontier Field Services and Durango Midstream here. This is meat and potatoes for Eddy County.”
Cargile said work install pipes could start in December and the plant could tentatively start operations in early 2024.
Davis said an ordinance requiring commissioners to move forward with the actual bond sale would be set for a future meeting of the Commission.
More:Permian Basin oil and gas growth expected to lead U.S. in production through 2023
Mike Smith can be reached at 575-628-5546 or by email at [email protected] or @ArgusMichae on Twitter.
