EagleClaw Midstream on Wednesday pulled the trigger on Delaware Link, a pipeline with at least 1.2 Bcf/d of capacity that would transport residue natural gas from the Permian Basin to the Waha hub, with access to downstream takeaway connections.
The portfolio company of Blackstone Energy Partners and I Squared Capital said the 40-mile, 30-inch diameter system is expected to be anchored by residue volumes from EagleClaw’s processing facilities and third-party customers in West Texas.
The pipeline would originate at the East Toyah, Pecos and Pecos Bend gas processing complexes in Reeves County.
“Given the level of producer inquiry, EagleClaw is also evaluating increasing the pipeline’s diameter and related transportation capacity,” management said.
The pipeline link is intended to provide exploration and production companies working in the Delaware sub-basin with “further flow assurance and improved price realization by providing a direct, cost-advantaged path to Waha and multiple interconnections at Waha to various takeaway pipelines.”
Interconnections would include direct access to the Permian Highway Pipeline (PHP) now under construction and set for service in the second half of 2020. The 2.1 Bcf/d, 42-inch diameter system is designed to move gas from Waha to the Texas coast and beyond.
PHP is a joint venture between units of Kinder Morgan Inc., EagleClaw and Apache Corp., as well as an affiliate of another anchor shipper. ExxonMobil Corp.’s XTO Energy Inc. last year signed a letter of intent to potentially contract for up to 450,000 Dth/d of capacity.
EagleClaw also said it has begun commissioning its fourth cryogenic processing plant at the Pecos Bend site, Pecos Bend IV, with service planned for May. Completing the plant, which was acquired in conjunction with last year’s acquisition of Caprock Midstream Holdings, would bring EagleClaw’s total interconnected processing capacity in the Delaware to 1.3 Bcf/d.
EagleClaw is also working to connect the Sierra Grande site in Culberson County, recently acquired in conjunction with its purchase of Pinnacle Midstream, to the overall system via a high-pressure connector line, which should be completed by June.
In other news, EagleClaw CEO Bob Milam, who co-founded the company in 2012, is retiring, with President and CFO Jamie Welch taking the helm. Milam is to remain on the board and serve as vice chairman.