Midland-based Oil Company announces new 220- mile pipeline

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Oryx Midstream Services, a Texas-based oil company, is planning to build a 220-mile pipeline from Carlsbad, New Mexico, to Midland, Texas. This new crude oil transportation pipeline will serve the Delaware Basin, the second-largest basin within the Permian Basin, and have the capacity to transport up to 400,000 barrels per day.

The cost of the project has not yet been disclosed, however, Oryx raised $340 million from investors this year alone. Earlier this week they announced that they had closed a major transportation deal with Oklahoma based WPX Energy and several other area producers for the 300,000 acres that will be dedicated to the project.

In a statement, Oryx CEO Brett Wigg 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” adding “With this strong production growth comes transportation bottlenecks, an issue that this new pipeline will address, providing much-needed takeaway capacity in the area.”

Oryx, founded three years ago by Houston equity firms Quantum Energy Partners, Post Oak Energy Capital, and Wells Fargo Energy Capital, has already begun construction. The pipeline will include 16-inch, 20-inch, and 24-inch lines and will have receipt points in the Carlsbad, Stateline, Pecos, and Pyote areas throughout the basin. Oryx expects the pipeline to be finished and operational by the end of 2018.

The Permian Basin accounts for the majority of the country’s oil growth and this project is just one in a slew of ongoing projects intended to catch up with the growing oil production in the area.

Karl Pfluger, Oryx President, stated that the company is “considering strategic opportunities to leverage the unique scale of our combined footpring to better serve producers in the Delaware Basin. One of these strategic opportunities includes a potential long-haul transport system to the Gulf Coast.”

Article written by HEI contributor Kevin Abbott.

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