Nuverra Environmental Solutions Inc. (NYSE: NES) has entered into a long-term definitive agreement with XTO Energy Inc., a subsidiary of Exxon Mobil Corp., to provide water-related pipeline services in McKenzie County, North Dakota.
Under the agreement, Nuverra will build the 150-mile McKenzie County pipeline network to provide produced water gathering and disposal services and fresh water delivery. The XTO agreement is a long-term, fee-based gathering agreement.
The network will serve XTO's dedicated acreage, as well as other operator wells in the area. It will feature fixed, buried pipelines that will include a gathering line to transport produced and flowback water for disposal or recycling and a distribution line for fresh water delivery.
The network is projected to cost $125 million to $150 million, based on current engineering and construction specifications, with completion during the fourth quarter of fiscal 2015. Construction is expected to begin in May 2015.