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Energy Transfer Building Out Permian Midstream for ExxonMobil’s XTO

ExxonMobil Corp. subsidiary XTO Energy Inc. has struck a long-term contract with Energy Transfer Partners LP (ETP) to build a midstream facility and gathering lines for some properties in the Permian Basin.

No financial details were provided.

ETP agreed to build a 130 MMcf/d cryogenic processing plant in Glasscock County, TX, expandable to 200 MMcf/d. More than 100 miles of high-pressure and low-pressure gathering pipeline for natural gas liquids also would be built for the facility, scheduled for service by the end of September.

The new midstream facility in the Permian would expand ETP's "strategic initiative," officials said. The assets also would provide more revenue downstream, with connectivity to the Energy Transfer Fuel gas transmission system and the Lone Star Star NGL pipeline system, which carries NGLs to fractionating facilities in Mont Belvieu, TX.

ExxonMobil now controls around 1.5 million net acres in the Permian Basin. Earlier this month XTO agreed to help Endeavor Energy Resources LP fund development in about 34,000 gross acres within the Permian's Wolfcamp formation in Texas in Midland and Upton counties (see Shale Daily, Feb. 3). XTO plans to drill and operate horizontal wells in the deeper intervals, while Endeavor is to operate the shallow production.

In 2013 ExxonMobil began ramping up activities in the West Texas region to develop conventional and unconventional reservoirs (see Shale Daily, Oct. 31, 2013). The operator had on average eight operated rigs in the Permian last year and turned almost 100 wells to sale across the entire basin.

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