PROPWR Bringing Gas-Fired Gen-Sets and Microgrid to Keep Permian Wells Humming

Independent oil and gas producer Coterra Energy contracted PROPWR to provide power for the development and installation of multiple distributed microgrids across the New Mexico portion of the Permian Basin.

The Permian Basin, which spans parts of west Texas and southeastern New Mexico, is the most productive oil field in the U.S. With most drilling and production sites in remote areas far from the grid, microgrids provide the reliable, resilient on-site power necessary to keep operations running.

Unexpected power outages can cost oil and gas companies millions in lost revenue and damaged equipment.

While the exact number of microgrids to be developed under the contract was not disclosed, deployment and operation is expected to begin in the first quarter 2026.

PROPWR is a Midland, Texas-based subsidiary of ProPetro Holding Corporation, which provides completion and power services to upstream oil and gas companies in North America.

Launched in 2024 as a turnkey gas-to-power generation solutions provider, the Coterra contract brings PROPWR’s total committed capacity to more than 220 MW, with an average contract length of about five years at signing, according to the company.

“This agreement is a major step forward for PROPWR’s vision of delivering reliable, innovative power solutions to Permian operators,” Travis Simmering, president of PROPWR, said in a statement. “By integrating PROPWR’s technical expertise and flexible assets with the operational excellence and forward-thinking approach of Coterra Energy, we’re able to offer a highly responsive, scalable energy platform tailored to the unique demands of oilfield microgrid installations.”

Navigating supply chain challenges

To keep pace with its development pipeline, PROPWR says it has nearly 550 MW of capacity either delivered or on-order (including the 220 MW already under contract), with all units to be delivered by the end of 2027.

Approximately 70% of that equipment is natural gas reciprocating engine generators. The remaining 30% is low emissions modular turbines.

PROPWR’s cost per megawatt averages $1.1 million, according to a company statement. Averages vary, but 2023 calculations by the U.S. Energy Information Administration estimated that solar cost close to $1.6 million per MW and battery storage about $1.3M per MW, while natural gas-fired electricity generation was closer to $790,000 per MW.

“We are excited to showcase the momentum and tangible progress of PROPWR,” said Sam Sledge, PROPWR CEO, in a statement. “We believe this progress puts us on solid footing to achieve our long-term growth goals and positions PROPWR to be a leading provider of power services across multiple industries.”

Beyond natural gas

While Coterra is pursuing natural gas-powered microgrids with PROPWR, other oil and gas companies are exploring alternative power sources for their microgrids.

Diamondback Energy last year said it was investigating the use of small modular reactors (SMR) with Oklo, while oilfield services firm  Nabors Industries and energy transition firm e2 Companies are collaborating on on-site electrification solutions for oilfield and geothermal companies.