Concho is contributing water infrastructure assets to Solaris Water in exchange for cash and equity, and Solaris Water will manage Concho's produced water in Eddy County, New Mexico
Image: Concho provides 13 salt water disposal wells and approximately 64Km of produced water gathering pipelines. Photo: Courtesy of Paul Brennan from Pixabay.
Concho Resources and Solaris Water Midstream have formed a strategic joint venture to optimise produced water logistics at scale in the Northern Delaware Basin.
The two companies have signed a long-term produced water management agreement, as part of the joint venture.
Under the agreement, Solaris Water is expected to manage produced water gathering, transportation, disposal and recycling from Concho’s approximately 1.6 million acres site located mainly in Eddy County, New Mexico.
Concho will contribute 13 salt water disposal wells for stake in Solaris Midstream Holdings
In exchange for cash and an equity ownership in Solaris Midstream Holdings, the parent of Solaris Water, Concho will contribute 13 salt water disposal wells and approximately 40 miles (64km) of large-diameter produced water gathering pipelines
Solaris Water chief executive officer Bill Zartler said: “We are committed to providing dependable, low cost produced water handling and water supply solutions to operators across the Permian Basin. This joint venture accelerates the expansion of our Pecos Star System, which is the premier integrated water infrastructure system serving the prolific Northern Delaware Basin.
“Concho is a leading operator with top-tier assets, an impressive organization, and a stellar reputation, and we could not be more pleased to be Concho’s water infrastructure provider over such a large position in the Northern Delaware Basin.”
Solaris Water is planning to incorporate the assets obtained from Concho into its growing integrated Pecos Star System.
The system includes more than 300 miles (482km) of large-diameter gathering pipelines, with a capacity to dispose more than 500,000 barrels per day, in addition to the storage and recycling facilities and water supply pipelines serving approximately 20 oil and gas operators.
Solaris Water is expected to provide blended reuse source water for Concho to enable a significant increase in the use of recycled water in its operations.
Concho president Jack Harper said: “Our joint venture with Solaris will provide effective and responsible water management and recycling solutions across our core position in Eddy County, New Mexico. Solaris is well positioned to deliver a reliable produced water takeaway solution and an innovative and efficient produced water recycling platform.”