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San Mateo Midstream agreement for natural gas gathering

Published by
World Pipelines,

San Mateo Midstream, LLC has announced that its wholly-owned subsidiary, DLK Black River Midstream, LLC, has entered into a long-term agreement with a producer in Eddy County, New Mexico relating to the gathering and processing of such producer’s natural gas production. As a result of this agreement, along with prior natural gas gathering and processing agreements entered into by San Mateo’s other customers, San Mateo has now entered into contracts to provide firm gathering and processing services for over 200 million ft3/d of natural gas, or over 80% of the designed inlet capacity of 260 million ft3/d of natural gas, at its Black River cryogenic natural gas processing plant (Black River Processing Plant) in Eddy County, New Mexico.

In March 2018, San Mateo completed a natural gas liquids (NGL) pipeline connection at the tailgate of the Black River Processing Plant to the NGL pipeline owned by EPIC Y-Grade Pipeline, LP. The NGL connection ensures San Mateo customers firm NGL takeaway out of the Delaware Basin and firm fractionation for those NGL volumes further downstream.

Matt Spicer, Senior Vice President and General Manager of San Mateo, said, “This contract, and others we have entered into in 2018, have significantly diversified San Mateo’s customer base as we continue to provide first class midstream services to producers in the area. We pride ourselves on generating value for our customers by providing services across all three production streams – oil, natural gas and salt water – and look forward to continuing to be a full-service midstream solution for producers in the northern Delaware Basin.”

This is the second announcement in 2018 of a significant customer addition by San Mateo. In June 2018, San Mateo announced that it had entered into a long-term agreement with a significant producer in Eddy County, New Mexico relating to the gathering and disposal of such producer’s salt water. That agreement included the dedication of over 65 wells, which are located within five miles of San Mateo’s existing salt water gathering system in Eddy County, New Mexico. In addition, San Mateo completed its fourth and fifth commercial salt water disposal wells in Eddy County, New Mexico during 3Q18 and is presently evaluating a sixth and seventh salt water disposal well. San Mateo currently has total salt water disposal capacity of approximately 225 000 bpd in Eddy County, New Mexico and Loving County, Texas. San Mateo expects to dispose of over 200 000 bpd of salt water as early as 1Q19, which includes expected volumes from Matador Resources Company and San Mateo’s other contracted producers in Eddy County, New Mexico and Loving County, Texas.

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