Summit Midstream Partners and XTO Energy (XTO) have inked a deal to build a new natural gas gathering and processing system with an investment of $110m in the northern Delaware Basin in New Mexico.

The new greenfield development project for XTO which will be developed, owned and operated by Summit will come up in the Eddy and Lea counties.

Initially, the partners will build a gathering and processing system which will have high and low pressure gathering and discharge pipelines. The system will also feature a couple of compressor stations along with a cryogenic processing plant having a processing capacity of 60MMcf/d.

According to Summit, the cryogenic processing plant is likely to process the natural gas produced by XTO and other nearby producers.

It will be flexible to be expanded in the future to accommodate more processing to reach a capacity of 600 MMcf/d eventually to cater to the requirements of the customers.

Summit Midstream Partners president and CEO Steve Newby said: “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.”   

By June 1, 2018, Summit expects the initial phase of the project to be operational.

Headquartered in Texas, Summit Midstream develops, owns and operates midstream energy infrastructure assets located across core producing areas of unconventional resource basins, especially shale formations in continental US.

Image: Summit and XTO will construct a natural gas gathering and processing system in the Delaware Basin.