NGL Energy Partners unveils major boost to water infrastructure with LEX II pipeline expansion
(UI) — NGL Energy Partners LP has commenced the expansion of its Lea County Express Pipeline System from a capacity of 140,000 barrels of water per day to 340,000 barrels per day in 2024 (LEX II Expansion).
The addition of a second large-diameter pipeline, disposal wells, and facilities will greatly expand the capabilities of NGL’s existing produced water super-system and create a significantly larger outlet for produced water disposal within the Delaware Basin.
The construction of the 27-mile, 30-inch produced water pipeline will transport water to areas outside the core of the basin thereby further diversifying NGL’s geographic location of its disposal operations. The LEX II Expansion is fully underwritten by a recently executed minimum volume commitment contract that includes an acreage dedication extension with an investment grade oil and gas producer.
This expansion encompasses the construction of a 27-mile, 30-inch diameter produced water pipeline with an initial capacity of 200,000 barrels per day. It goes beyond mere capacity augmentation, as there is also a notable incremental increase in committed acreage and volumes under dedication from the producer.
This strategic move positions the Lea County Express Pipeline System to be expandable to an impressive 500,000 barrels per day, solidifying NGL's commitment to meeting growing demands and ensuring scalability for the future.
“NGL remains focused on our commitment to deliver reliable produced water management for our customers while remaining focused on the environment and the sustainability of our operations,” commented Doug White, EVP of NGL Water Solutions. “Today’s announcement highlights our investment in the long-term future growth and reliability of our infrastructure which provides our customers with confidence to plan their long-term developments in the Delaware Basin. This large minimum volume commitment provides additional cash flow certainty to the Partnership as NGL continues to improve its balance sheet.”
NGL owns and operates the largest integrated network of large diameter wastewater pipelines, disposal wells and produced water handling systems in the Delaware Basin. NGL’s Water Solutions segment operates in several of the most prolific crude oil and natural gas producing basins, including the Delaware, Eagle Ford and DJ Basins.
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