Pinnacle Midstream II LLC has sanctioned a new-build natural gas gathering and compression system in the Permian Basin anchored by a 15-year gathering, processing and purchasing agreement with Doublepoint Energy LLC.

The Dos Picos gathering system in the Midland sub-basin of West Texas is expected to enter service in the second quarter of 2021, Pinnacle said Tuesday. The system was designed “with expansion in mind.”

Citing DoublePoint’s acreage as “some of the best” in the basin, Pinnacle CEO J. Greg Sargent said Dos Picos “will be a game changer for DoublePoint and many other producers operating in the Midland Basin” due to its strategic location.

“Pinnacle has ready access to the capital required to align the gathering and compression infrastructure in the...