Quantum Energy Partners-backed Oryx Midstream Services II (Oryx II) plans to construct a new 354km-long inter-state regional crude oil pipeline system in the Delaware Basin.

The pipeline system, which will comprise 16-, 20- and 24-inch pipelines, will initially have a transportation capacity of up to 400,000 barrels per day. It will also have the ability to expand depending on shipper requirements and will cover the US states of California, Nevada, Texas and New Mexico.

Construction of the pipeline system is set to commence with immediate effect and will be done in phases.

The Oryx II crude oil pipeline system is anticipated to be in full service by 2018 end.

It will source crude oil from the Carlsbad, Stateline, Pecos and Pyote areas and transport it to Crane and Midland in Texas.

Oryx CEO Brett Wiggs said: “As ongoing improvements are made in drilling technologies and rig counts in the Delaware Basin increase, production growth from Oryx’s customer base, including WPX, continues to be strong.

“With this strong production growth comes transportation bottlenecks, an issue that this new pipeline will address, providing much-needed takeaway capacity in the area.”

According to Oryx II, the crude oil pipeline system will serve production from Eddy and Lea counties in New Mexico and Loving, Pecos, Winkler, Reeves, Ward and Culberson counties in Texas, among other active counties in the Delaware Basin.

Recently, Oryx II completed a long-term regional oil transportation agreement with WPX Energy and other producers. Following it, the total acres committed to Oryx II has grown to around 300,000 dedicated acres. 

The combination of Oryx II and Oryx Midstream Services, (Oryx I) would take the total Oryx Delaware basin dedication footprint and system capacity to over 850,000 acres and 600,000 barrels per day, respectively.