Double E Pipeline Project

The Double E Pipeline Project involves the construction of a natural gas pipeline within the states of New Mexico and Texas in the US.

It is being developed by Summit Midstream Partners (SMLP) under a 70:30 joint venture partnership with ExxonMobil Permian Double E Pipeline. SMLP owns the 70% interest in the project through its indirect wholly owned subsidiary Summit Permian Transmission.

The interstate pipeline will supply 1.35 billion standard cubic feet per day (Bscfd) of natural gas over a distance of 217.6km. The development is estimated to involve a total capital investment of up to $425m.

The project was approved for construction by the Federal Energy Regulatory Commission (FERC) in October 2020 and the pipeline is expected to be commissioned during the fourth quarter of 2021. The FERC awarded the notice to proceed with construction and approval for the project implementation plan in January 2021.

Double E Pipeline Project route

The Double E Pipeline will transfer natural gas from multiple receipt points in the Delaware Basin in south-east New Mexico and west Texas to multiple delivery points near the Waha Hub in Texas.

The natural gas pipeline will originate in Eddy County, New Mexico and run through Eddy and Lea Counties in New Mexico and Loving, Ward, Reeves and Pecos Counties in Texas before terminating at Waha in Texas.

Double E Pipeline Project details

The pipeline will start from SMLP’s existing Lane Processing Plant in Eddy County, New Mexico and traverse approximately 53.6km to the proposed Poker Lake Meter Station in Eddy County. The proposed diameter for this section of the trunk-line is 30in.

The next section of the pipeline will have a diameter of 42in and length of 135.5km, traversing from the Poker Lake Meter Station to the final exit point at the Waha Operational Facility in Texas. The Waha section will include the Waha Receiver and Separation site, four mainline block valves, a 42in-diameter pig launcher, a 42in-diameter pig receiver and, a receipt meter (Lobo Receipt Meter Station).

In addition, the project will include a 2.2km-long, 42in-diameter pipeline from the summit site at Waha to the final location in Pecos County, Texas.

A new 30in-diameter lateral line measuring approximately 26.2km-long is also proposed to be constructed to connect the existing Loving Processing Plants to the trunkline in Eddy County.

Project financing

The project received financing commitments worth $175m from three commercial banks to support the Double E pipeline project. The funding is sourced from senior secured credit facilities including a delayed draw term loan facility worth $160m and a $15m working capital facility.

Summit Midstream Partners signed an agreement with global private equity firm TPG in December 2019, for the purchase of redeemable, preferred interests worth up to $80m in Summit Permian Transmission Holdco. In return, TPG will fund $80m of Permian Holdco’s capital commitment associated with the Double E project.

Transportation capacity agreement

Summit Midstream Partners signed a precedent agreement with Exxon Mobil’s subsidiary XTO Energy for transportation capacity on the new pipeline in July 2021.

XTO will become a foundation shipper with a transportation capacity of up to 500,000 dekatherms per day (dth/d) for ten years.

Benefits of the Double E pipeline project

The Double E pipeline will connect the growing natural gas supply from the Delaware basin to a liquid trading point with several existing and planned takeaway pipelines.

The natural gas supply will also contribute towards the reduction of emissions and the environmental impact of pollution. The Double E pipeline project will generate long-term tax revenues to the counties along the pipeline route.