DALLAS—San Mateo Midstream LLC on Dec. 19 announced that its wholly owned subsidiary, San Mateo Black River Oil Pipeline LLC, has placed into service its crude oil gathering and transportation system in Eddy County, N.M., (Rustler Breaks Pipeline System) following a successful open season to gauge shipper interest in committed crude oil interstate transportation service earlier this year. Rustler Breaks includes approximately 17 miles of 10-inch diameter crude oil gathering and transportation pipelines from origin points in Eddy County, to an interconnect with Plains Pipeline LP.

As announced on Jan. 22, San Mateo and a subsidiary of Plains All American Pipeline LP (NYSE: PAA) have entered into a strategic relationship to gather and transport crude oil for upstream producers in Eddy County. Subsidiaries of San Mateo and Plains have agreed to work together through a Joint Tariff arrangement and related transactions to offer producers located within a joint development area of approximately 400,000 acres in Eddy County crude oil transportation services from the wellhead to Midland, Texas with access to other end-markets.

The completion of the Rustler Breaks Pipeline System is an important step in this strategic relationship as oil has begun flowing from the wellhead in Eddy County to Midland through a connection with Plains. The system is sufficient to support growing volumes from its anchor customer, Matador Resources Co., and other producers without significant additional capital investment.

Matt Spicer, Senior Vice President and General Manager of San Mateo, said, “Placing the Rustler Breaks Pipeline System into service completes San Mateo’s goal of being a full-service midstream solution for producers in the northern Delaware Basin. San Mateo is now able to offer services across all three production streams—crude oil, natural gas and produced water. Gathering and transporting crude oil through the Rustler Breaks Pipeline System offers significant cost savings and flow assurance for producers as compared to transporting crude oil by truck. We look forward to continuing to provide best-in-class service as we add value and reliability for our customers.”

Onshore