Coldstream Energy Launches the MaCH4™ NGL Recovery Solution with Archrock as Strategic Distribution Partner

Rhea-AI Summary

Coldstream Energy has launched its MaCH4™ NGL Recovery Solution, partnering with Archrock (NYSE: AROC) as a strategic distributor. The innovative gas separation technology maximizes NGL recovery at compressor stations while reducing emissions.

The MaCH4 system features a compact design with no rotating components or chemicals, capable of supporting up to 8,250 horsepower. Key benefits include:

• Estimated $1.1 million in incremental NGL revenue
• 35 tons reduction in annual VOC emissions
• Up to 9% improvement in engine performance by preventing derating

The solution has demonstrated success in a pilot project with Iron Horse Midstream since December 2023, achieving over 99% mechanical availability. At the pilot site, the projected annual NGL value recovery exceeds $1.2 million for a 7,500 HP compressor station.

Positive

• Strategic partnership with Archrock (NYSE: AROC) for market expansion
• Potential $1.1M incremental annual NGL revenue generation
• 99% mechanical availability in pilot project
• Up to 9% engine performance improvement
• Projected $1.2M annual NGL value recovery at pilot site

Negative

• None.

Insights

Natural Gas Industry Expert

Coldstream Energy's MaCH4 NGL Recovery Solution represents a strategically significant addition to Archrock's product portfolio that extends beyond their core compression services. This technology addresses three critical industry pain points simultaneously: capturing valuable NGLs that would otherwise be burned as fuel, reducing emissions to help meet regulatory requirements, and improving engine performance to maximize throughput.

The financial implications for Archrock are compelling. With each MaCH4 unit potentially generating $1.1 million in annual NGL recovery value for customers, Archrock gains a high-value offering that complements their existing compression services. This creates an opportunity to increase revenue per customer while strengthening strategic relationships with producers and gatherers seeking both operational improvements and emissions compliance.

The timing aligns perfectly with the EPA's new methane regulations that took effect in 2024, which impose stricter emissions limits on compression facilities. As operators face increasing pressure to reduce VOC emissions while maximizing throughput, solutions that accomplish both objectives while generating additional revenue will see accelerated adoption. The ability to avoid Title V permitting by staying below Major Source thresholds represents significant regulatory and cost advantages for operators.

Field validation at Iron Horse Midstream, with 99% mechanical availability since December 2023, demonstrates commercial readiness and reliability. The compact, chemical-free design with no rotating components suggests favorable maintenance economics compared to alternative NGL recovery methods, aligning with Archrock's expertise in equipment maintenance and monitoring.

This partnership positions Archrock to evolve from a pure compression service provider to a technology solutions partner, potentially commanding premium pricing while differentiating from competitors. As regulatory pressures intensify and operators seek to maximize the value of every molecule, Archrock's strategic distribution rights for the MaCH4 could become an increasingly valuable competitive advantage in customer acquisition and retention.

Energy Financial Analyst

This strategic partnership with Coldstream Energy represents a significant opportunity for Archrock to diversify beyond its traditional compression services business model. With Archrock's extensive footprint across U.S. natural gas basins and relationships with producers and midstream companies, the company is perfectly positioned to commercialize this technology at scale.

The financial implications could be substantial. Archrock serves approximately 30% of the U.S. contract compression market, with thousands of units deployed across major basins. If the company can convert even a modest percentage of suitable compression stations to adopt the MaCH4 solution, it could create a meaningful new revenue stream with potentially higher margins than traditional compression services, which typically generate 35-40% gross margins.

This partnership aligns perfectly with Archrock's strategic evolution toward higher-value services. While compression remains a stable, fee-based business, it offers growth opportunities in a mature market. The MaCH4 technology allows Archrock to capture additional value from existing customer relationships without significant capital investment, potentially improving return on invested capital.

From a competitive standpoint, this exclusive distribution agreement creates a meaningful differentiation from other compression providers like USA Compression Partners and CSI Compressco. As operators face intensifying regulatory pressures to reduce emissions while maximizing efficiency, solutions that address both challenges while generating additional revenue will likely see accelerated adoption.

The timing is particularly advantageous given the EPA's new methane regulations that took effect in 2024. These regulations impose stricter emissions limits on compression facilities, creating urgent demand for cost-effective compliance solutions. The MaCH4's ability to reduce VOC emissions by 35 tons annually per unit while simultaneously improving engine performance and generating NGL revenue makes it an exceptionally attractive value proposition.

For investors, this partnership suggests Archrock is successfully executing on its strategy to evolve from a pure compression provider to a more diversified energy infrastructure solutions company, potentially warranting a valuation multiple expansion over time if this higher-margin business segment grows meaningfully.

HOUSTON--(BUSINESS WIRE)-- Coldstream Energy, LLC (“Coldstream”), an innovator in natural gas processing technology for maximizing profits and reducing emissions at compressor stations, today announced the launch of its MaCH₄ NGL Recovery Solution (“MaCH₄”).

MaCH₄ is an energy- and cost-efficient gas separation solution developed and patented by Coldstream. The solution is highly effective at recovering NGLs, reducing VOC emissions from compressor stations, and avoiding engine performance derating for maximizing station throughput and fee-based revenue.

“The MaCH₄ innovation positions Coldstream as a technology company focused on helping upstream and midstream operators maximize operational efficiency and comply with increasingly stringent emissions regulations in a profitable manner,” said Mathias Schlecht, Chief Executive Officer of Coldstream. “The MaCH₄ is a novel application of proven Pressure Swing Adsorption technology, which brings NGL recovery rates comparable to cryogenic plants to compressor station facilities to produce lean, pipeline quality fuel gas, while capturing the valuable NGL’s for downstream processing and monetization. The MaCH₄ is like having a virtual pipeline of lean fuel gas on site without a physical residue line.”

In connection with this announcement, Coldstream has entered into a strategic partnership and distribution agreement with Archrock, Inc. (“Archrock”) (NYSE: AROC) to accelerate market expansion and meet rising demand for the MaCH₄ solution. Archrock is a premier provider of natural gas compression services to customers in the energy industry throughout the U.S. and a leading supplier of aftermarket services to customers that own compression equipment.

“We are pleased to serve as the strategic partner for Coldstream’s MaCH₄, and excited to bring this innovative solution to compressor stations across the country,” said Brad Childers, President and Chief Executive Officer of Archrock. “There is already strong demand for the MaCH₄ system, and we look forward to capitalizing on the significant market opportunity as we unlock value for Archrock customers and shareholders alike.”

MaCH₄ NGL Recovery Solution – Pipeline Quality Fuel Gas Without the Residue Line

The MaCH₄ features a compact design with no rotating components or chemicals required, which minimizes long-term operating costs. It is a simple and economically compelling solution for maximizing NGL value, minimizing VOC emissions, and maximizing fee-based revenue for producers and gatherers, while also maximizing the efficiency and runtime of engines and respective compressors.

A single MaCH₄ unit can deliver sufficient lean fuel gas to support up to 8,250 horsepower and deliver significant benefits, including⁽¹⁾:

• Increased NGL Revenues. Generate an estimated $1.1 million in incremental NGL revenue through NGL recovery.
• Lower Emissions. Avoid 35 tons of VOC emissions annually, enabling facility expansion while potentially maintaining emissions levels below Major Source thresholds to avoid costly and time-consuming Title V permitting requirements.
• Higher Engine Performance. Remove and sell heavy hydrocarbons to deliver a lean fuel gas that avoids engine derating by up to 9%, increasing compressor throughput and operational efficiency.

⁽¹⁾Note that these results are based on 1,310 BTU HHV field gas; 1,080 BTU HHV fuel gas; lean burn engines; and 5-year average EIA NGL pricing. Engine fuel gas flow rate and associated gathering station HP will vary based on field gas composition and BTU HHV.

More information on the MaCH₄ NGL recovery solution is available on the company’s website at ColdstreamEnergy.com.

MaCH₄ Solution Demonstrates Field-Proven Performance at Iron Horse Midstream

The MaCH₄ has undergone a rigorous pilot project with Iron Horse Midstream, fueling a compressor station located in Grady County, OK, with lean gas since December 2023. The MaCH₄ has posted more than 99 percent mechanical availability since its commission, been remotely monitored and operated since May 2024, and will be converted into a permanent installation in the first quarter of 2025.

Based on a field gas BTU value of approximately 1,305 BTU/scf at the pilot site, the total annual NGL value recovered would be greater than $1.2MM for a 7,500 HP compressor station.

“At Iron Horse, we work tirelessly at improving operational efficiencies and overall system performance,” said T. D. Baskin, Chief Operating Officer at Iron Horse Midstream. “The MaCH₄ system is effective at recovering heavy hydrocarbons, resulting in a steady supply of lean fuel gas to compression. The benefits are reduced emissions, greater engine efficiencies, and increased system throughput. With the MaCH₄ solution, we can further reduce our VOC emissions and maintain levels below stringent operating permit thresholds.”

About Coldstream Energy

Coldstream Energy, based in Houston, Texas, is a leader in innovative natural gas conditioning and separation technology to maximize profits and minimize emissions for upstream and midstream operators.

At Coldstream Energy, we are passionate about our commitment to improving air quality and reducing waste of the Earth’s valuable resources. A sustainable oil and gas industry is the foundation of the modern global economy, providing affordable and reliable energy. At this pivotal time, our technology provides a tremendous opportunity to capture valuable resources that otherwise would be wasted by combusting NGLs in compressor engines or flaring natural gas. Not only is converting “field gas” into valuable products good for the environment, but it is also just good business.

Our solutions are engineered to recover Natural Gas Liquids (NGLs) efficiently and effectively for maximizing the value of natural gas production streams. We use proven technologies for recovering heavy hydrocarbons (C3+) from produced gas and tank vapors, generating incremental revenue, boosting operational efficiency, and improving environmental performance.

Our flagship MaCH₄ NGL Recovery System (NRS) is a breakthrough application of proven Pressure Swing Adsorption (PSA) technology for use in the oil and gas industry and is the simplest and fastest way to achieve cryogenic-quality NGL recovery and lean compressor engine fuel gas.

About Iron Horse Midstream

Based in Dallas, TX, Iron Horse Midstream is focused on natural gas and crude oil midstream services. The company operates a 425 MMcf/d cyrogenic natural gas processing complex in the heart of the SCOOP/STACK/Merge in the Anadarko Basin. Iron Horse also operates approximately 350 miles of high and low-pressure natural gas gathering pipelines and multiple compressor stations. For more information on the company, please visit www.ironhorsemidstream.com.

About Archrock, Inc.

Archrock is an energy infrastructure company with a primary focus on midstream natural gas compression and a commitment to helping its customers produce, compress and transport natural gas in a safe and environmentally responsible way. Headquartered in Houston, Texas, Archrock is a premier provider of natural gas compression services to customers in the energy industry throughout the U.S. and a leading supplier of aftermarket services to customers that own compression equipment. For more information on how the Company embodies its purpose, WE POWER A CLEANER AMERICA™, visit www.archrock.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250227365481/en/

Coldstream Energy, LLC

Mathias Schlecht

President and CEO

mschlecht@coldstreamenergy.com

Iron Horse Midstream

Meggan Morrison

Redbird Communications Group

meggan@redbirdpr.com

Archrock, Inc.

Megan Repine

VP Investor Relations

megan.repine@archrock.com

Source: Coldstream Energy, LLC

FAQ

What are the key benefits of Coldstream's MaCH4 NGL Recovery Solution?

MaCH4 generates $1.1M in NGL revenue, reduces VOC emissions by 35 tons annually, and improves engine performance by up to 9% by preventing derating.

How has the MaCH4 system performed in its pilot project with Iron Horse Midstream?

Since December 2023, MaCH4 has achieved over 99% mechanical availability and projects annual NGL value recovery exceeding $1.2M for a 7,500 HP station.

What is the significance of Archrock (AROC) partnership with Coldstream Energy?

Archrock will serve as strategic distribution partner to accelerate market expansion and meet rising demand for the MaCH4 solution across the U.S.

What is the maximum horsepower capacity supported by a single MaCH4 unit?

A single MaCH4 unit can deliver sufficient lean fuel gas to support up to 8,250 horsepower.

When will Iron Horse Midstream's MaCH4 pilot project become a permanent installation?

The pilot project will be converted into a permanent installation in the first quarter of 2025.