Summit Midstream Partners LP (NYSE: SMLP) said it executed an agreement with XTO Energy Inc. on July 7 to develop, own and operate a new associated natural gas gathering and processing system servicing acreage located in the northern Delaware Basin in Eddy and Lea counties in New Mexico.
Summit will initially construct a gathering and processing system with high and low pressure gathering and discharge pipelines, two compressor stations and a cryogenic processing plant with 60 million cubic feet per day (MMcf/d) of processing capacity. Summit will be able to expand the processing complex to over 600 MMcf/d of capacity.
Summit said it expects to process production from XTO and other nearby producers. The initial phase of the project is expected to be operational on or before June 1, 2018 at a total investment cost of approximately $110 million.
“Today’s announcement represents a significant step for Summit,” said Steve Newby, the company’s president and CEO. “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. We look forward to executing additional commercial agreements with other producers in the area.”