Western Midstream Partners, LP announced February 26, 2025, that it has sanctioned construction of the Pathfinder pipeline, a 42-mile, 30-inch steel produced-water pipeline in the Delaware Basin, and will invest $400.0 million to $450.0 million over the next 24 months to build out associated produced-water infrastructure. The Houston-based master limited partnership simultaneously executed a new long-term produced-water agreement with Occidental Petroleum Corporation that includes minimum-volume commitments for gathering, transportation, and disposal. All new infrastructure is expected to be in service by January 1, 2027.
What it means
Pathfinder will carry produced water to disposal facilities in eastern Loving County, with an initial capacity of 800 MBbls/d before any expansions. The broader infrastructure package adds 280 MBbls/d of firm gathering and transportation capacity and 220 MBbls/d of firm disposal capacity under the Occidental agreement, delivered through several large regional produced-water gathering facilities and export terminals and nine new saltwater disposal facilities in eastern Loving County. Western Midstream described the approach as “first-of-its-kind.” Amendments to legacy produced-water agreements with Occidental retain cost-of-service and fixed-fee components of the original contracts.
Western Midstream also amended its DJ Basin natural-gas gathering agreement with Occidental, adding up to ten years to certain minimum-volume commitments and extending the gathering agreement by two years through mid-2035. The partnership said approximately 50 percent of its 2025 capital expenditures will be directed to the Delaware Basin, with the majority of that spending focused on expansion. Additional volumes are expected to begin processing in the second quarter of 2025. The partnership also announced it will not pay an Enhanced Distribution in 2025 and has retired that concept, instead planning to recommend a Base Distribution increase beginning in the first quarter of 2025, to be paid in May.
Key facts
- Pathfinder pipeline: 42 miles, 30-inch steel, 800 MBbls/d initial capacity, eastern Loving County, Delaware Basin
- Total infrastructure investment: $400.0 million to $450.0 million over 24 months (according to the company)
- Expected in-service date: January 1, 2027
- New Occidental agreement: 280 MBbls/d firm gathering and transportation capacity; 220 MBbls/d firm disposal capacity
- New saltwater disposal facilities: 9 incremental SWD wells in eastern Loving County
- DJ Basin natural-gas gathering agreement extended through mid-2035
- ~50 percent of 2025 capital expenditures allocated to the Delaware Basin (according to the company)
- 2025 Adjusted EBITDA guidance: $2.350 billion to $2.550 billion (according to the company)
Source: Western Midstream Partners, LP news release (PRNewswire)