Exxon Mobil’s wholly owned subsidiary XTO Energy has reached a deal for firm transportation capacity on Summit Midstream Partners’ (SMLP) Double E Pipeline, an interstate pipeline that will deliver 1.3Bcf/d of natural gas from the northern Delaware Basin to the Waha Hub, US.
With the take-or-pay agreement, XTO is set to have up to 500,000 dekatherms per day (dth/d) of firm transportation capacity for ten years on the Double E pipeline.
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Expected to be commissioned in 2021, the pipeline will transport gas from multiple receipt points in the Delaware Basin in New Mexico and Texas to delivery points around the Waha Hub.
Summit Midstream Partners president and CEO Steve Newby said: “Today’s announcement deepens and further strengthens our relationship with XTO and broadens SMLP’s service offering for XTO in the Delaware Basin. Double E Pipeline will support the full production potential of acreage in the northern Delaware Basin.”
The company is responsible for the development, permitting and construction of the project, as well as operatorship of the Double E pipeline.
SMLP has also entered an option agreement with ExxonMobil, under which the latter will have the right to become an equity partner in Double E through the equity interest acquisition of up to 50%.
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By GlobalDataSMLP is planning to launch a binding open season next month for an additional firm capacity of up to 500,000dth/d on the pipeline.
Once the binding open season concludes, the company expects to make a final investment decision on the project.
The initial throughput capacity of the pipeline is anticipated to be more than one billion cubic feet a day.
SMLP is currently assessing interest expressed by other financial parties in equity participation and alternative financing structures to fund its share of the project.
