Oryx Midstream Services said Tuesday it has successfully completed an open season for a new regional crude oil gathering and transportation system to serve the Permian Basin’s liquids-rich Delaware formation, which runs through West Texas and into southeastern New Mexico.
The new 700,000 b/d system would include more than 500 miles of gathering and transportation pipeline in addition to more than 1.5 million bbl of storage capacity. With the expansion, Oryx said it would serve production from every active county in the Delaware, including New Mexico’s Lea and Eddy counties, and the West Texas counties of Loving, Reeves, Ward, Pecos, Winkler and Culberson.
When complete, the system would boost Oryx’s overall Delaware transportation capacity to more than 900,000 b/d. The company expects to complete the first phases of the project by the end of this year, with the entire system expected to be completed by mid-2019.
Oryx CEO Brett Wiggs said the company expects continued production growth in the area for decades.
“The results of our open season were resounding, as rapid growth has increased the need for access to gathering and storage capacity, and more efficient transportation logistics across the basin,” he said. “Our new system and increased storage footprint will allow us to provide crude oil segregation and connectivity for our customers in Texas and New Mexico to multiple takeaway options, providing the market flexibility they need to maximize the value of their production.”
Midland, TX-based Oryx began building a 220-mile pipeline system to serve the play last year. However, customer demand prompted the company to expand the project. The open season was launched in July and later extended to conclude on Aug. 31. When the open season started, Oryx was planning a 400-mile system, with about 650,000 b/d of throughput capacity.
The expansion comes as a broader midstream buildout is underway in the Permian, where oil production is booming and operators are quickly filling existing pipeline capacity.
Oryx said its new project would also expand its footprint in the Delaware. The open season resulted in 300,000 acres of new long-term acreage dedications in New Mexico’s Eddy and Lea counties, and in Texas’ Loving and Reeves counties. The deals increased Oryx’s dedicated acreage to 900,000 acres from more than 20 producers, making it the largest private crude oil midstream company in the Delaware.