Oryx expansion makes it largest midstream in Delaware Basin

By Patrick C. Miller | September 25, 2018

Oryx Midstream Services of Midland, Texas, has successfully completed an open season to support the development and construction of a new regional crude gathering and transportation system providing additional pipeline capacity across the northern Delaware Basin.

Oryx’s 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—are supporting this development. The new system will extend into Eddy and Lea counties of New Mexico, including a significant presence in the State Line area of Texas and New Mexico.

The expanded Delaware Basin system will consist of more than 500 miles of new gathering and transportation pipeline with more than 1.5 million barrels of storage capacity, and ultimate throughput capacity of approximately 700,000 barrels per day. With this expanded reach, Oryx will serve production from every active county in the Delaware Basin, including Lea and Eddy counties in New Mexico and Loving, Reeves, Ward, Pecos, Winkler and Culberson counties in Texas.

“As the Delaware Basin continues to have the most compelling upstream economics and depth of inventory of any basin in North America, we see continued production growth in our focus area for decades to come,” said Brett Wiggs, Oryx CEO. “The results of our open season were resounding, as rapid growth has increased the need for access to gathering and storage capacity, and more efficient transportation logistics across the basin.”

After the system’s completion, Oryx’s total Delaware Basin transportation capacity will exceed 900,000 barrels per day. The system will also provide oil quality segregation and batching capabilities through more than 2 million barrels of operational storage capacity to maintain the quality of multiple grades of crude oil streams across the company’s footprint.

The completed system will also expand its deliverability to major liquidity points across the Permian Basin. Construction on the new system is ongoing. Oryx expects to complete the initial phases of the project in the second half of 2018, with the system expansion expected to be completed in the second quarter of 2019.

Successful open season resulted in Oryx significantly expanding its footprint across the Delaware Basin through the execution of new, long-term acreage dedications totaling approximately 300,000 acres in Eddy and Lea counties in New Mexico and Loving and Reeves counties in Texas. These new dedications bring the company’s total acreage to about 900,000 acres from more than 20 producers. According to the company, this makes Oryx the largest, private midstream oil supply aggregator in the Delaware Basin.

“Our new system and increased storage footprint will allow us to provide crude oil segregation and connectivity for our customers in Texas and New Mexico to multiple takeaway options, providing the market flexibility they need to maximize the value of their production,” Wiggs said.