Splish Splash - Streamlining Permian Water Delivery and Produced Water Takeaway, Part 3

The Permian is experiencing the build-out of a wide variety of midstream infrastructure: crude oil and natural gas gathering systems, gas processing plants and crude, gas and NGL takeaway pipelines. Lately, there’s also been a rush to develop pipelines to deliver water to wells for use in hydraulic fracturing, as well as pipes to transport produced water from the lease to disposal wells and produced-water recycling plants. By installing and expanding these water and produced-water pipeline systems — some of them hundreds of miles long — Permian producers and third-party water-logistics providers are reducing the need for trucks on the Permian’s congested roads and significantly reducing per-barrel water transportation costs. Today, we continue our blog series on water-related pipeline, storage and treatment infrastructure in the Permian’s Delaware and Midland basins.

RBN’s middle-of-the-road Growth Scenario shows Permian crude oil production rising by about 500 Mb/d a year through the early 2020s — topping 3 MMb/d late this year, 4 MMb/d in late 2020 and 5 MMb/d in late 2022 — and recent increases in oil prices could accelerate the pace of that growth. As we said in Faster Horses, the Permian’s expansion is driven by what you might call the supersizing and “assembly-lining” of production in the play. Producers are piecing together ever-larger leaseholds in the parts of the Delaware and Midland basins they have determined to be the most promising, and filling in gaps so their holdings are contiguous and are not interspersed with leases held by other producers. That is enabling producers to drill longer horizontal wells or laterals (now often 7,500 to 10,000 feet, and sometimes longer). And they are intensifying their well completions with the use of more pressure, more water, more frac sand per linear foot of lateral and more frac stages.

With their large, uninterrupted acreage, many producers are making long-term plans for the phased, sequential development of their leaseholds, an approach that helps to optimize operational efficiency and minimize costs. All this lends itself to the build-out of pipeline-and-storage networks to (1) deliver large volumes of water to newly drilled wells for use in hydraulic fracturing and (2) gather even larger volumes of produced water that emerges from wells with crude and associated gas.

In Part 1 of this series, we noted that it can take several hundred thousand barrels of water to frac a typical horizontal well in the Permian (or elsewhere), and water volumes consumed in the play have been increasing with the length of laterals and the intensity of well completions. As new Permian wells are completed, they generate flowback water (the portion of the water used in hydraulic fracturing that returns to the surface) and produced water (the water that was already underground, and that comes up with crude and associated gas). Both flowback and produced water need to be gathered, treated and/or disposed of, mostly in what are called saltwater disposal wells (SWDs). Flowback water volumes are just a one-time shot for each completed well — a small portion of the several hundred thousand barrels of water used to frac a well comes back to the surface as flowback water that must be dealt with. The much bigger, longer-term challenge is dealing with the large volumes of produced water, which keep coming and coming as long as the well is producing hydrocarbons. Most new horizontal wells in the Delaware Basin generate between three and four barrels of produced water alongside each barrel of crude, with produced water volumes spiking in the first few weeks of well production (like crude volumes) and then declining. (Produced-water volumes per barrel of crude in the Midland Basin are typically much lower than those in the Delaware.)

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