A subsidiary of Riviera Resources Inc. plans to build a new crude gathering line in Oklahoma’s Anadarko basin as part of a newly inked shipping deal with exploration and production (E&P) company Roan Resources LLC, Riviera said Wednesday.
Blue Mountain Midstream LLC will build a new 50-mile crude system that would have an initial capacity of roughly 60,000 b/d, which could increase pending the results of an open season process to solicit additional shippers. The route would begin in the Merge formation of the Anadarko Basin and includes two downstream interconnections that would give Roan access to the Cushing crude market.
The company said construction could begin immediately, with the line in service by the end of year.
Under the terms of the shipping deal, Blue Mountain would gather crude produced by Roan for a 10-year term in an area spanning 89,000 net acres and nine townships in central Oklahoma.
“Service diversification has been a keen focus,” said Blue Mountain CEO Greg Harper. “By adding crude gathering, Blue Mountain can now provide our E&P customers a full suite of midstream services.”
Up to now, Blue Mountain’s main midstream services have revolved around natural gas gathering and processing, as well as water management.
Blue Mountain’s gas gathering and processing assets, as well as its water infrastructure, are all located in the Merge area of the formations known as the SCOOP (South Central Oklahoma Oil Province) and the STACK (Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties).
In April, Blue Mountain signed on an additional third-party shipper that dedicated additional acres to its gas infrastructure in the Merge.
In July 2018, Blue Mountain indicated that it was mulling additional gas gathering and processing expansions in its coverage area after the Federal Energy Regulatory Commission approved construction of a residue natural gas line to help expand Oklahoma takeaway just a few months prior.
Oil and gas production in Oklahoma has by and large continued to increase on a monthly basis, barring some weather-related upsets in the spring.
Roan Resources said last year that it planned to double its Oklahoma production in 2019.