Some of the Oklahoma exploration companies and others drilling in West Texas might see a little more pipeline relief following the announcement of a joint venture to build another line taking oil out of the Delaware Basin.
But it also might mean a wait of several months until the line to be built by Salt Creek Midstream LLC, and Noble Midstream Partners LP is completed. The two announced this week the formation of a 50/50 partnership to construct a 200,000 barrel a day pipeline system.
Work is already underway by Salt Creek based in Houston and the company expects the new crude oil pipeline to be in operation by next spring.
The 95-mile, 20-inch diameter line will originate in Pecos County, Texas with additional connections in Reeves County and Winkler County providing shippers with access to multiple downstream outlets. The companies anticipate the agreements and closing to happen in the fourth quarter of 2018.
At closing, the project will be underpinned by approximately 180,000 dedicated acreage contributions from Noble Midstream and Salt Creek and five other Southern Delaware Basin producers, with a line of sight to additional dedications totaling approximately 100,000 acres.
This includes partial dedication of Noble Energy’s Reeves County position totaling approximately 70,000 acres. The project footprint will be served by a combination of nearly 100 miles of pipeline in Pecos, Reeves, Ward and Winkler Counties, in-field crude gathering lines and a trunkline to Wink Hub that will provide critical downstream connectivity for producers in the Southern Delaware Basin.