Texas General Land Office (GLO) has expanded its exclusive long-term water agreement in the Delaware Basin with Layne Water Midstream LLC.
In a Jan. 27 news release, the Permian water midstream company said the Texas GLO agreed to an amendment that gives Layne Water Midstream additional exclusive rights regarding reuse and disposal of produced water in the Delaware Basin located on GLO’s roughly 88,000 acres in Reeves and Culberson counties.
Layne Water Midstream, a portfolio company of Houston-based firms Post Oak Energy Partners LP and Genesis Park LP, had signed the original agreement in November 2017, which initially enabled the company to develop, construct, own and operate water infrastructure to produce and sell non-potable water to oil and gas companies in the region.
However, with the expansion, Layne Water Midstream will now be better abled to serve energy producers through a full range of water midstream services including simple and cost-efficient access to source water, recycled water and disposal infrastructure, according to J. Michael Anderson, CEO of Layne Water Midstream.
“The amendment allows us to invest further in water infrastructure on GLO lands in order to gather produced water from energy producers for treatment and reuse in hydraulic fracturing operations and for disposal. ... Our GLO partnership is designed to generate water-related revenue streams for the GLO and make it easier for energy producers to operate on GLO acreage,” Anderson said in a statement.
Revenues from water sales and services will be shared between Layne Water Midstream and the Permanent School Fund, the land and mineral assets of which are managed by the GLO. Layne Water Midstream is in the process of filing numerous water disposal permits on GLO land and expects that it will construct water infrastructure for recycling and/or disposal during 2020, according to the company press release.
The combined company is expected to generate annual synergies of $1.2 billion and will operate as Cenovus Energy Inc with headquarters in Alberta.
DTE Midstream transports natural gas extracted from shale basins in Appalachia and Louisiana.
Market conditions are weighing on a number of planned expansion projects, Kinder Morgan said, adding that they were not needed at least in the near term.