ExxonMobil Corp. has launched a binding open season for a major pipeline to connect Permian Basin oil and condensate from production areas in New Mexico to its terminal in West Texas near Wink.
The open season to Oct. 14 is seeking shippers for the 480,000 b/d Delaware Connector under construction, which is scheduled to begin operations in early 2020.
The Delaware Connector joins a joint venture that includes ExxonMobil for the Wink-to-Webster pipeline, a 36-inch diameter system that would move more than 1 million b/d from Wink and Midland, TX, to Houston. Backed by Plains All American, Lotus Midstream, and a trio of midstreamers including MPLX LP, the project is expected to start operations in early 2021.
In addition, ExxonMobil and state-owned Saudi Basic Industries Corp., aka SABIC, are anchoring two ethane and ethylene pipelines being constructed by Epic Y-Grade Holdings LP affiliates to support the partners’ massive steam cracker underway in South Texas.
ExxonMobil, with 51 rigs and 12 fracture crews in operation, during 2Q2019 saw its Permian output jump 90% year/year to average 274,000 boe/d; it is tracking to increase its Permian output to 1 million boe/d by 2024. The company’s rig count is expected to average around 55 by year end.
Recent oil and natural gas lease sales data from the Bureau of Land Management indicated that the highest bid received was for acreage in Eddy County, going to Cimarex Energy Co., which purchased 40 acres at slightly more than $30,000/acre.
The second quarter lease sale in New Mexico is sharply down from the 1Q2019 sale, in which the state pulled in $15.4 million for 45 parcels totaling 13,888 acres. The highest per-acre bid in the first quarter sale was more than $40,400 from ExxonMobil’s XTO Holdings LLC for 80 acres also in Eddy County. ExxonMobil is pouring more resources into the Permian than any other Lower 48 play.
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