NGL Wins Permian Produced Water Contracts

NGL Energy Partners LP Tuesday reported that it has signed separate, long-term produced water transportation and disposal agreements with two large producer customers in the Delaware Basin.

The new deals cover acreage dedications encompassing approximately 20,000 acres, NGL noted in a written statement. The firm stated that it expects to begin receiving initial produced water volumes in July of this year, adding that it will use existing infrastructure and disposal capacity to service the contracts.

NGL pointed out that it owns and operates the Northern Delaware Basin’s largest integrated network of large-diameter produced water pipelines, recycling facilities and disposal wells. The company added that its Water Solutions segment operates in the Delaware, Midland, Eagle Ford and DJ Basins, handling approximately 1.7 million barrels of produced water daily.

As Rigzone has reported, handling and disposing of produced water has become a growing challenge for Permian operators in recent years. In a May 2018 article, a Texas A&M University researcher referred to pipeline constraints as a “choke point” for getting products to market. The following April, consultancy Wood Mackenzie classified sourcing and disposing of water as the primary challenge to Permian field development. A pilot project that concluded in the region late last year reportedly made headway toward perfecting a process for treating and recycling produced and flowback water.