Medallion Midstream LLC and its affiliate Medallion Midstream Services LLC have signed a letter of intent to construct a Delaware basin crude oil pipeline system to provide gathering and transportation services for Parsley Energy Inc.
The pipeline will be anchored by Parsley’s long-term dedication to Medallion of 35,000 acres held under lease or mineral interest in Pecos and Reeves counties in Texas.
Medallion’s Delaware basin pipeline system will initially consist of 45 miles of 16-in. mainline and 25 miles of smaller-diameter gathering pipelines along with a crude station in Pecos County consisting of crude storage and truck unloading facilities.
The pipeline, which is expected to have an initial capacity of 100,000 b/d, will originate within the Parsley leases and will end in Crane County, Tex., at an interconnection into Medallion Pipeline Co.’s existing 600-mile Midland basin header system, accessing multiple Permian basin long-haul takeaway pipelines.
The parties expect to finalize and sign a definitive agreement in the first quarter of 2017 and the crude pipeline is expected to start initial service in June 2017.