Medallion Midstream and its affiliate, Medallion Midstream Services, entered into a letter of intent to construct a new Delaware Basin crude oil pipeline system to provide crude oil gathering and transportation services for Parsley Energy. The new pipeline will be anchored by Parsley’s long-term dedication to Medallion of 35,000 acres held in the Texas counties of Pecos and Reeves.
The system will initially consist of about 45 miles of 16-inch mainline and aabout 25 miles of smaller diameter gathering pipelines, along with a crude oil station in Pecos County consisting of crude oil storage and truck unloading facilities.
The pipeline, which is expected to have an initial capacity of 100,000 bpd, will originate within the Parsley leases and end in Crane County at an interconnection into Medallion’s existing 600-mile Midland Basin header system, accessing multiple Permian Basin long-haul take away pipelines. The parties expect to sign a definitive agreement in the first quarter of 2017, and the new crude oil pipeline is expected to start service in June 2017.