SMLP is expected to own a majority interest in the pipeline, and lead the development, permitting and construction of the project
Summit Midstream Partners (SMLP), a US-based midstream infrastructure assets owner and developer, has announced a final investment decision (FID) on the Double E Pipeline Project.
SMLP has secured sufficient commitments pursuant to binding precedent agreements for long-term, firm transportation service and executed definitive joint venture agreements with an affiliate of Double E’s Foundation Shipper.
SMLP interim president and chief executive officer Leonard Mallett said: “We are excited to announce our FID on the Double E Pipeline Project, which will provide critical energy infrastructure for rapidly growing residue natural gas volumes in the Northern Delaware Basin.
“The Double E Project will serve an infrastructure-constrained area, alleviate natural gas flaring, and provide access to growing markets along the U.S. Gulf Coast.”
Alongside the FID, the foundation shipper for Double E has amended its previously executed precedent agreement.
The project has secured 10-year take-or-pay volume commitments for a substantial majority of its initial throughput capacity of 1.35 billion cubic feet per day (Bcf/d), which can be expanded later to 1.85 Bcf/d with the installation of compression facilities.
SMLP said that Double E is expected to provide natural gas transportation service from multiple receipt points in the Delaware Basin to various delivery points in and around the Waha Hub in Texas.
SMPL to invest £275m in the Double E project
In addition, SMPL estimates its share of the capital expenditures to develop Double E at approximately $350m (£275.9m), and that more than 90% of those capital expenditures will be incurred in 2020 and 2021.
SMPL intends to fund its share of the capital expenditures for Double E using a combination of internally generated cash flow and proceeds from potential non-core asset divestitures.
Mallett added: “Double E is a marquee project for SMLP, and when combined with our existing gathering and processing operations in the Permian Basin, promotes our strategy of achieving scale, diversifying our operations downstream of wellhead gathering, and becoming more integrated in our Core Focus Areas.”
SMLP is expected to own a majority interest in the project, and lead the development, permitting and construction of the project, and is planning to operate Double E after commissioning.