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Open season launched for crude oil gathering and transportation system

Published by
World Pipelines,


Oryx Midstream Services II, LLC announced today that its operating subsidiaries, Oryx Delaware Oil Gathering NM LLC, Oryx Delaware Oil Gathering TX LLC, Oryx Western Delaware Oil Gathering LLC and Oryx Delaware Oil Transport LLC (collectively, ‘Oryx’), have launched a joint binding open season to secure volume commitments and/or acreage dedications to support the previously-announced regional crude oil gathering and trunk line transportation systems, which will serve the liquids-rich Delaware Basin in Texas and New Mexico. The binding open season commenced today, 10 July 2018 at 8 am CDT and is scheduled to conclude at 5 pm CDT on 9 August 2018.

Based on customer demand, Oryx has expanded the scope of the original project to include additional capacity and a larger footprint across the Delaware Basin. The new system is expected to consist of approximately 400 miles of new gathering and transportation pipeline, with approximately 650 000 bpd of throughput capacity and more than 1.5 million bbls of storage capacity. The new gathering and transportation system will span the Delaware Basin and is expected to provide services to Lea and Eddy counties in New Mexico and Loving, Reeves, Ward, Winkler and Culberson counties in Texas.

Construction on the new system has begun and the regional transportation pipeline, which will connect Oryx’s Carlsbad station to the Crane and Midland market hubs, is expected to be fully commissioned during 4Q18. The full system is expected to be complete in 2Q19. Upon completion, and when combined with Oryx Midstream Services, LLC’s assets (operated by Oryx Southern Delaware Oil Gathering and Transport LLC), Oryx’s total Delaware Basin system capacity will exceed 850 000 bpd.

“We are pleased to launch this open season to support the construction of incremental transportation and gathering capacity in the rapidly expanding Delaware Basin. The new system extension and storage footprint allows us to provide crude oil segregation and connectivity for our customers in the Texas and New Mexico areas of the northern Delaware Basin to multiple takeaway options, providing the flexibility and market opportunities they need to maximise the value of their production,” said Brett Wiggs, Oryx Midstream Services’ Chief Executive Officer. “Rapid production growth has increased the need for access to gathering capacity and more efficient transportation logistics across the basin. We are focused on the execution of this project in the proposed timeframe to provide our customers with much-needed relief from rate variability and administrative and operational burdens associated with trucking alternatives.”

Open season information

The binding open season process provides potential shippers with the opportunity to make volume commitments or acreage dedications to Oryx Delaware Oil Gathering NM LLC, Oryx Delaware Oil Gathering TX LLC and Oryx Western Delaware Oil Gathering LLC and or Oryx Delaware Oil Transport LLC by executing gathering and/or transportation services contracts with Oryx. Shippers that elect to make commitments to Oryx Delaware Oil Transport LLC during the open season for movements on the trunk line will receive firm transportation for their committed volumes. Shippers that elect to make commitments to Oryx Delaware Oil Gathering NM LLC, Oryx Delaware Oil Gathering TX LLC and or Oryx Western Delaware Oil Gathering LLC during the open season for movements on any of the gathering systems will receive firm gathering service for their committed volumes. Shippers that receive firm service will be required to pay a premium rate compared to the rate offered to similarly-situated walk-up shippers.

Read the article online at: https://www.worldpipelines.com/business-news/10072018/open-season-launched-for-crude-oil-gathering-and-transportation-system/

 

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