The Texas based companies’ joint venture will operate in the Reeves and Culberson counties.
According to Santa Fe founder and managing partner Amer Rathore, the joint venture will deliver superior midstream solutions for producers in the two counties.
As part of the partnership, the Forth Worth based Vermilion will provide a 20” natural gas pipeline and related facilities in Culberson County along with dedicated acreage.
On the other hand, Santa Fe will inject the additional funds for the construction of gathering pipelines along with a new 200 MMcfd cryogenic gas processing plant which will be set up in the Culberson County. The Plano based midstream firm will take over as the operator of the midstream assets as per the joint venture agreement.
Vermilion founding partner Jeff Cook said: “The Santa Fe – Vermilion midstream joint venture is well positioned to deliver exceptional service and flexibility for producers in the southern Delaware Basin. Vermilion Cliffs Partners is honored to join the fine team at Santa Fe Midstream to pursue this venture.”
Producers in the Delaware Basin will be provided natural gas gathering and processing, crude oil gathering as well as produced water gathering to their disposal wells by the Santa Fe – Vermilion joint venture.
Santa Fe managing Partner and Commercial VP said: “In addition, we look forward to working with Vermilion Cliffs Partners to utilize their vast experience in both the upstream and midstream sides of the business.”
The joint venture will deliver natural gas residue to downstream interstate and intrastate pipelines catering to the Mexican, Western US and Texas markets. It will also deliver natural gas liquids for transportation as well as fractionation at Mont Belvie in Texas through pipelines.
The two partners stated that the facilities of their new joint venture will meet a critical requirement for midstream services in the fast expanding Delaware Basin’s central and southern sections.
