Summit Midstream Partners LP (SMLP) has signed an agreement with XTO Energy Inc. to develop, own and operate a new associated natural gas gathering and processing system in the northern Delaware Basin in Eddy and Lea counties in New Mexico, US.
The company will construct a gathering and processing system with high and low pressure gathering and discharge pipelines, two compressor stations and a cryogenic processing plant that has a processing capacity of 60 million ft3/d.
The capacity of the processing complex can be expanded to over 600 million ft3/d. Summit expects to process production from XTO and other nearby producers.
The initial phase of the project is expected to be operational on or before 1 June 2018 at a total investment cost of approximately US$110 million.
Steve Newby, President and Chief Executive Officer of Summit, said: "Today's announcement represents a significant step for Summit. This greenfield development project establishes Summit as a key midstream service provider in the Delaware Basin, one of the most active, economic and exciting plays in North America. This initial system is expected to provide SMLP with a platform for significant organic expansion across crude oil, natural gas and produced water gathering and/or processing services for years to come. We look forward to executing additional commercial agreements with other producers in the area."