Western Midstream to build pipeline for Permian produced water transport

Western Midstream Partners announced that it has sanctioned the construction of the Pathfinder pipeline, a 30-inch long-haul pipeline, that will transport produced-water to additional disposal facilities in eastern Loving County within the Delaware Basin. This first-of-its-kind approach will enable WES to transport produced-water volumes away from high-activity areas with increasing pore pressures and to better utilize existing disposal capacity, maximize flow assurance for our customers, and facilitate future organic growth opportunities as Occidental and other operators execute their long-term development plans.

Additionally, WES will expand its existing produced-water gathering and disposal system to support continued customer development in the basin over the coming years. These investments are backed by a new long-term agreement with Occidental that includes corresponding minimum-volume commitments for gathering, transportation, and disposal.

Over the next 24-months, WES will invest approximately $400.0 million to $450.0 million to construct the following produced-water infrastructure:

• The Pathfinder pipeline: a 42-mile, 30-inch steel pipeline with the capacity to transport over 800 MBbls/d, before any expansions,
• Several large, regional produced-water gathering facilities and export terminals with total incremental capacity of approximately 280 MBbls/d, and
• Nine incremental saltwater disposal facilities (SWDs) strategically located in eastern Loving County with effective disposal capacity of approximately 220 MBbls/d.

This new infrastructure is expected to be in service by January 1, 2027.

"We are excited to utilize our years of produced-water experience in the Delaware Basin to provide an innovative midstream solution that generates strong returns through Occidental's initial commitment and provides capacity for substantial growth from additional customers," said Oscar Brown, President and CEO.

"WES leveraged its existing infrastructure and strategic landowner partnerships to secure access to existing pore space in eastern Loving County and to better facilitate produced-water disposal in the basin. Pathfinder's construction enhances our ability to meet customers' needs, expand the business by aggregating produced water from throughout the Delaware Basin, and efficiently transport and responsibly dispose of volumes in a sustainable manner. By utilizing our produced-water expertise, we are able to provide an industry-leading, innovative solution to the growing disposal challenges in the Delaware Basin."

"I am also pleased to announce that we have executed amendments with Occidental related to our legacy produced-water agreements. These amendments retain the cost-of-service and fixed-fee components of the original agreements, better support Occidental's long-term development plans, and extend WES's average-contract life in the Delaware Basin. In addition, we also executed an amendment with Occidental adding up to ten years to certain minimum-volume commitments tied to natural-gas processing in the DJ Basin, which in turn extended our natural-gas gathering agreement in the basin by two years through mid-2035. Furthermore, these amendments in both basins continue to demonstrate the strength of our relationship with Occidental and will provide additional support for sustainable distribution growth for years to come."

"As we look to the future, we expect that the expansion of our produced-water system, coupled with Pathfinder, will be the first of many organic projects to support continued partnership-wide growth, as our strong Free Cash Flow profile and investment-grade balance sheet enable us to continue capitalizing on incremental opportunities and growing the Base Distribution over time," concluded Mr. Brown.

 

Related News

From Archive

• Most Read
• Most Commented