Nuverra, XTO Energy connect on water pipeline

By The Bakken Magazine Staff | December 12, 2014

Nuverra Environmental Solutions may be known for moving liquids by truck, but a new contract with XTO Energy Inc. will shed light on its ability to build and operate pipeline infrastructure. XTO Energy, a subsidiary of Exxon Mobil, has contracted Nuverra to build a 150-mile dual pipeline system to move produced water from its well sites and bring fresh water to them. The system, expected to cost between $120 million and $150 million, will be located in McKenzie County, North Dakota. Construction could start in May and end in the fourth quarter.

The pipeline will serve XTO and other operators in the area looking to move or receive water. Lines will be fixed and buried in the ground. Terms of the contract have not been disclosed, but Nuverra said the contract is a long-term, fee-based agreement.

Mark Johnsrud, Nuverra CEO, said the pipeline represents a transformational step for the company, “to become a fully-integrated environmental solutions provider in North Dakota.” The pipeline makes sense for the company, he added, due to the well density increase and growing water volumes present in the area.

XTO Energy represents the operator working in ExxonMobil’s most active unconventional play. The Bakken is the liquids growth engine of the U.S. for the company, Jeff Woodbury, vice president of investor relations, said recently. The company is running 13 drilling rigs in the play, and since it entered the Bakken, in 2008, has increased new wells brought online year-over-year by 25 percent. Since 2011, XTO Energy has reduced drilling and completion costs by 25 percent. The company has been deploying a proprietary frack technique that reduces costs by eliminating the need for multiple plugs in the well bore, Woodbury said, and is working on pad development.