Summit Midstream to develop new gas processing system in Delaware Basin

US-based Summit Midstream Partners (SMLP) has signed an agreement to develop, own and operate a new natural gas gathering and processing system for XTO Energy in the Delaware Basin, with an aggregate investment of $110m.

The proposed system is expected to service acreage located in Eddy and Lea counties in New Mexico.

SMLP will initially construct a gathering and processing system equipped with high and low-pressure gathering and discharge pipelines, two compressor stations and 60 million cubic feet per day (mmcfpd) cryogenic processing plant. 

The company noted that the processing capacity can be expanded to more than 600mmcfpd.

SMLP president and CEO Steve Newby said: "This greenfield development project establishes Summit as a key midstream service provider in the Delaware Basin, one of the most active, economic and exciting plays in North America.

“This initial system is expected to provide SMLP with a platform for significant organic expansion across crude oil, natural gas and produced water gathering and / or processing services for years to come.”

Through the facility, Summit is planning to process production from XTO and other nearby producers.

It is expected that the initial phase of the project will become operational on or before 1 June next year.