Crestwood Midstream's DELTA pipeline project will launch a non-binding open season later this week, seeking commitments for crude and condensate flows starting at the company's proposed Orla terminal in the Delaware Basin, Senior Vice President Brian Freed said Monday at Hart Energy's Midstream Texas conference.
The pipeline would carry 200,000 b/d of crude and condensate from the gathering facility in Orla, Texas, to takeaway pipelines as far away as Midland and McCamey, Texas. Depending on the pipeline connections the company can secure, the crude and condensate could then make its way to export and refining markets near Houston or Corpus Christi, Texas.
The Orla terminal will be able to stabilize 75,000 b/d of condensate, and the DELTA pipeline will be batched, which means condensate processed at the terminal could make its way to coastal export markets without losing its export-eligible status by mixing with unprocessed crude.
The Orla terminal will have 200,000 barrels of crude and condensate storage capacity and a truck facility capable of handing 64,000 b/d, along with access to the company's RIGS gathering system.
Company representatives were not available Monday to say when the DELTA pipeline project or the Orla terminal would be operational.
DELAWARE BASIN STILL VIABLE MIDSTREAM MARKET
The company is able to work on the project despite the downturn in oil prices because it is located in an active part of Texas' Delaware Basin, Freed said.
"The devil is in the details, and you've got to look at things on a localized basis," he said. "Sub $60/b works in some areas and doesn't in others."
Even beyond that, Christopher Keene, the CEO of Rangeland Energy II, which is also building midstream infrastructure in the Permian Basin said he does not think the market is going to remain low forever.
"We know where the oil is; it's not a matter of if, it's just when. When will that turnaround happen? At some point in time, those crude prices are going to start rising, and we're going to see that activity start to ramp up again," Keene said. "We've seen this movie before."
Sugar Land, Texas-based Rangeland Energy II is building the RIO system, which includes terminals, pipelines, and rail infrastructure to move crude and condensate from West Texas and New Mexico east to Midland.
