Oryx Midstream Services II, LLC today announced it will construct a new regional crude oil transportation pipeline serving the Delaware Basin with initial capacity of up to 400,000 barrels per day. Oryx II recently closed on a long-term regional oil transportation agreement with WPX Energy and other producers bringing total acres committed to Oryx II to approximately 300,000 dedicated acres. When combined with Oryx Midstream Services, LLC (Oryx I), the total Oryx Delaware basin dedication footprint and system capacity will exceed 850,000 acres and 600,000 barrels per day, respectively.
Construction will start immediately on the new 220-mile regional transport line that will provide receipt points from the Carlsbad, Stateline, Pecos and Pyote areas, and deliver crude to Crane and Midland, Texas. The system, comprised of 16-, 20- and 24-inch lines, will have an initial capacity of up to 400,000 barrels per day with the ability to expand based on shipper needs. It will serve production from every active county in the Delaware Basin including Lea and Eddy counties in New Mexico and Loving, Reeves, Ward, Pecos, Winkler and Culberson counties in Texas. The new crude oil pipeline will be constructed in phases and is expected to be in full service by the end of 2018.
“As ongoing improvements are made in drilling technologies and rig counts in the Delaware Basin increase, production growth from Oryx’s customer base, including WPX, continues to be strong,” Oryx Midstream Chief Executive Officer Brett Wiggs said. “With this strong production growth comes transportation bottlenecks, an issue that this new pipeline will address, providing much-needed takeaway capacity in the area. The Oryx team remains focused on improving and expanding our asset base, to not only meet producers’ current needs but also anticipate the future needs of our customers.”
Oryx I was launched in 2014 by an initial equity commitment totaling up to $300 million from Quantum Energy Partners, Post Oak Energy Capital, Wells Fargo Energy Capital, Oryx management and other private investors. In March 2017, Oryx II closed on an equity commitment of $340 million from the same sponsor group, bringing the total commitment to Oryx to $640 million.