Concho Resources and Frontier Midstream Solutions have executed an agreement to create a new joint venture Beta Crude Connector (BCC).
Image: Frontier will serve as operator for the new joint venture BCC. Photo courtesy of outgunned21/Freeimages.com.
Concho and Frontier will each own a 50% equity interest and Frontier will serve as operator for the new joint venture BCC.
BCC is expected to construct and provide crude oil gathering, transportation and storage services in the Northern Midland Basin to support the continuous growth in oil production in the region.
The new gathering and transportation system to be built by BCC will comprise an approximately 161km gathering system, 250,000 barrels of crude oil storage facilities along with truck terminals.
The pipeline system is expected to have the initial capacity of 150,000 barrels of crude oil delivered to multiple delivery points per day, accessing local refineries and connecting to several downstream pipelines.
After the completion of an open season in April 2019, construction is scheduled begin on the pipeline system , with initial flows expected by mid-2019.
BCC will file for FERC authority to operate as a common carrier pipeline and solicit interest from other producers and marketers for capacity on the new system.
Frontier Chief Executive Officer Dave Presley said: “We are pleased that Beta Crude Connector will be the latest of our full-service midstream solutions and our second joint venture partnership with Concho as we demonstrate our commitment to quality partnerships and solutions for producers once again.
“We are pleased to have a world-class producer in Concho as our partner and are excited with the quality of the resource behind it. We are dedicated to the successful operations and growth of the Beta Crude Connector.”
Concho, which is one of the largest unconventional shale producers in the Permian Basin, has also agreed to enter into a long-term acreage dedication agreement with BCC.
Concho president Jack Harper said: “We are excited to partner again with Frontier in the development of the Beta Crude Connector. Through the joint venture, we will leverage Frontier’s midstream expertise and enhance the value of our high-quality footprint in the Midland Basin with a reliable, cost-efficient gathering and transportation solution.
“Importantly, this is a compelling investment opportunity that we can make with no changes to our capital plans.”