H2O Midstream LLC said June 14 it acquired produced water assets in the Permian Basin from Encana Corp. (NYSE: ECA) for an undisclosed amount.
H2O Midstream's acquisition is concurrent with the execution of an acreage dedication based midstream water services agreement with Encana's U.S. subsidiary to gather, dispose and deliver for reuse produced water for a substantial portion of Encana’s acreage position in Howard County, Texas.
The acquisition includes ownership and operation of Encana’s existing produced water gathering system in the Permian consisting of more than 100 miles of interconnected pipeline and five saltwater disposal wells totaling 80,000 barrels per day (bbl/d) of permitted disposal capacity.
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H2O Midstream said it plans to expand the existing system significantly through the addition of new produced water pipelines, additional disposal wells and the construction of a state-of-the-art water storage and reuse hub.
"This acquisition fits perfectly with our strategy of building an expansive gathering, disposal and storage network to provide producers a full suite of midstream water services in the Permian Basin," Jim Summers, CEO of H2O Midstream, said in a statement. "Our goal is to create long-term value for our partners by significantly lowering their lease operating costs, reducing their total capital requirements and delivering best in class service in the areas of reliability, safety and sustainability."
By 2018, H2O Midstream expects to have more than 200 miles of pipeline for gathering, 140,000 bbl/d of disposal capacity and more than 2 million bbl of storage to serve Encana as well as other nearby producers.
Based in Houston, H2O Midstream is a private equity funded energy midstream company focused exclusively on water throughout U.S. shale plays.
H2O Midstream is funded by EIV Capital and co-investments from several of EIV’s institutional partners collectively representing more than $50 billion in assets under management, according to a company press release.
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