Shale water, gas infrastructure build outs from early June

By Luke Geiver | June 18, 2018

As talk of midstream infrastructure and takeaway constraints continue in the Permian Basin, announcements of midstream project completions continue.

Gravity Oilfield Services Inc. recently announced the completion of two saltwater disposal wells drilled into the Ellenburger formation of the Midland Basin. One of the wells is already taking produced water from operators in Howard County, Texas, and the second well is now taking commitments from operators in the region looking to move their produced water and flowback.

Phillip Wright, executive vice president of Gravity, said his company “will continue to expand its network of produced water pipeline infrastructure in the Permian Basin as part of its integrated water management strategy, which includes significant water infrastructure, logistics and reuse capabilities.”

Also on the water infrastructure side of the Permian, WaterBridge Operating LLC closed on a $200 million credit facility led by SunTrust Bank. The loan will be used to support WaterBridge’s investment in water infrastructure within West Texas and the Arkoma Basin of southeast Oklahoma. In the Permian, WaterBridge has 19 SWD facilities, more than 70 miles of produced water pipelines and more than 500 mbl/d of disposal capacity. The company has already invested more than $500 million in water infrastructure.

San Mateo Midstream LLC has entered into a long-term agreement with Marathon Oil to gather and dispose of water in Eddy County, New Mexico. The agreement includes the dedication of over 65 wells, all of which are located within five miles of San Mateo’s existing SWD gathering system. By the end of Q3 this year, San Mateo intends to have completed its fifth SWD well in the area.

In the gas sector, Vaquero Midstream announced the opening of its Caymus II natural gas processing facility in Pecos County, Texas. The facility, along with its predecessor, are served by more than 135 miles of high and low pressure rich gas gathering pipelines.

“The timely installation and startup of Caymus II is a testament to the strong relationships Vaquero has with our contractor and vendor partners,” said Gary Conway, CEO and president. “Several producers on our system have increased their drilling and completions programs and Vaquero’s goal is to be ahead of their production so when they need us, we are there for them,” adding that the company intends to continue enabling producers to accelerate their drilling and completion plans.