A treater flow diagram for the Brazos Amine Treater facility, a joint venture between Caracara Services and Battalion Oil to remove H2S and CO2 from natural gas production and store it in a depleted reservoir.

Traditional ways of handling the carbon dioxide (CO2) and hydrogen sulfide (H2S) are being replaced by more environmentally friendly methods.

One example is a joint venture between Battalion Oil Corp. and Caracara Services to develop an acid gas treatment and carbon sequestration facility in Winkler County. It will operate as Brazos Amine Treater LLC.

“Traditionally operators have released the CO2 and with the H2S, flared it, which creates sulfuric acid or acid rain,” Todd Lechtenberger, chief operating officer with Caracara, told the Reporter-Telegram in a telephone interview.

The facility, scheduled to open in the spring of 2023, will have an initial capacity to treat 30 million cubic feet a day of natural gas for CO2 and H2S with combined concentrations of up to 10 percent. It will have the capacity to capture and sequester more than 50,000 tons per year of both H2S and CO2. It will utilize an acid gas injection well, the Hutchings-Sealy No. 4, which was drilled and completed to 18,250 feet and permitted for the injection of acid gas.

“We’re stripping those materials out of the gas stream and sequestering them, putting them back where we found them in an environmentally friendly way,” Lechtenberger said. That will leave pipeline-quality sweet gas to be delivered back to Battalion or other producers to deliver to midstream providers.

The service, he said, will help operators be more carbon neutral and meet their ESG – Environmental, Social and Governance – initiatives.

Clane LaCrosse, Caracara chief executive officer, told the Reporter-Telegram the company pivoted to such services during the recent downturn caused by the pandemic and amid changes in environmental initiatives.

“We looked at how we could contribute to environmental changes,” he said, settling on contributing to capture and sequestration. He said the move made sense given the concentration of operators in the Permian Basin. Establishing the facility “lets the process be efficiently developed.”

The project has been in development for the last 18 months with an additional six months before construction is complete next February and the plant comes online. Already, there is talk of a second phase adjacent to the new facility with a capacity of up to 30 million cubic feet. It would serve Battalion and other operators in and around the Monument Draw area of Ward and Winkler counties.

Lechtenberger said the company is also looking at ways to not just sequester the CO2 and H2S but to utilize them. He said there also talks with producers on creating custom niche solutions to handle their sour gas. He noted that the company’s custom treatment plans will be located closer to the welklhead, offering producers greater operational freedom and choice of processors.

The industry has really embraced the movement to eliminate emissions, said Lechtenberger. “We’re looking at ways to not just sequester but to put them to use in an environmentally friendly way.”

The two see the deal as a win-win-win not just for the environment but for producers and consumers. The facility can take production from fields that aren’t as developed because of the low quality of the gas, remove the H2S and CO2, and return marketable gas to producers, who get to sell more product to consumers, who now have access to more product.

“This is an opportunity for the oil and gas industry to take a truly environmentally friendly approach to developing fields,” said LaCrosse.

In a statement announcing the joint venture, Battalion Chief Executive Officer Richard Little stated, “This agreement is a key milestone for Battalion as we transition to profitable growth and further balance sheet improvement. Not only does it provide a comprehensive solution for our current and future sour gas treating needs, but it does so while considerably reducing our operating costs. We are very excited to break ground on this project and look forward to seeing it operational in early 2023.”

Mella McEwen is the Oil Editor for the Midland Reporter-Telegram.