Kinetik was approved by the Texas Railroad Commission to build 8.2 mile pipeline in Reeves County, TX (pernit #10633). Kinetik has positioned itself as one of the largest midstream companies in the Delaware Basin, with a significant operational footprint that includes over 4,600 miles of pipeline and management of approximately 1.4 million serviced acres across Texas and New Mexico.
Permit Number 10633
Delaware Basin Overview
In the Kinetik Second Quarter 2024 presentation, the company provided several updates and insights related to their operations and strategic activities in the Delaware Basin:
- Expansion in the Delaware Basin:
- Kinetik has positioned itself as one of the largest midstream companies in the Delaware Basin, with a significant operational footprint that includes over 4,600 miles of pipeline and management of approximately 1.4 million serviced acres across Texas and New Mexico.
- Strategic and Operational Developments:
- The acquisition of Durango Permian has expanded Kinetik’s system footprint in the Delaware Basin, specifically into northern Eddy and Lea Counties, New Mexico. This acquisition is expected to enhance their midstream capabilities and contribute to future growth in the region.
- Kinetik’s Delaware Link pipeline and their interest in major long-haul pipelines, such as a 33% interest in the Shin Oak pipeline, a 15% interest in the EPIC Crude pipeline, and a 55.5% interest in the Permian Highway Pipeline (PHP), highlight their significant infrastructure presence in the Delaware Basin.
- Project and Infrastructure Updates:
- Kings Landing Cryo Complex: Located in Eddy County, New Mexico (part of the Delaware Basin), the Kings Landing Cryo I facility is expected to come online in April 2025 with a processing capacity of 200 Mmcfpd. The company has also sanctioned pre-FID work for Kings Landing Cryo II, indicating continued investment in expanding their processing capabilities in the Delaware Basin.
- GCX Divestiture: Kinetik completed the divestiture of a 16% non-operated equity interest in the Gulf Coast Express (GCX) pipeline. The proceeds from this sale were used to fund other capital projects, including those in the Delaware Basin.
- Financial Performance and Capital Allocation:
- Kinetik reported strong financial performance from their Delaware Basin operations, with continued volume growth on the Delaware Link pipeline. They highlighted contributions from the Permian Highway Pipeline (PHP) expansion and Delaware Link, which drove a 25% year-over-year increase in the Segment Adjusted EBITDA for their pipeline transportation segment.
- Focus on Growth and Future Potential:
- The company emphasized the strategic importance of the Delaware Basin to their overall business, with ongoing investments in infrastructure to support future volume and EBITDA growth. The revised 2024 capital expenditures guidance reflects significant spending on projects in the Delaware Basin, particularly in New Mexico.
These points illustrate Kinetik’s strong operational presence and ongoing investment in the Delaware Basin, which is central to their growth strategy and future financial performance​
