San Mateo Black River Oil Pipeline, a subsidiary of San Mateo Midstream, has commissioned the Rustler Breaks Pipeline System, a crude oil gathering and transportation system in New Mexico.
The Rustler Breaks Pipeline System, which is located in Eddy County, was put into service after the firm secured shipper commitments through an open season held earlier this year.
The crude oil pipeline system comprises nearly 27kms of 10inch diameter pipelines originating from Eddy County and interconnecting to Plains Pipeline.
San Mateo senior vice president and general manager Matt Spicer said: “Placing the Rustler Breaks Pipeline System into service completes San Mateo’s goal of being a full-service midstream solution for producers in the northern Delaware Basin.
“San Mateo is now able to offer services across all three production streams—crude oil, natural gas and produced water. Gathering and transporting crude oil through the Rustler Breaks Pipeline System offers significant cost savings and flow assurance for producers as compared to transporting crude oil by truck.”
In January 2018, San Mateo entered into a strategic relationship with a subsidiary of Plains All American Pipeline to collect and deliver crude oil for upstream producers in Eddy County.
Both the firms agreed to provide crude oil transportation services from the wellhead to Midland, Texas with access to other end markets to producers operating within a joint development area of nearly 400,000 acres in the region.
According to San Mateo, the completion of the Rustler Breaks Pipeline System is a major step for their strategic relationship with oil starting to flow from the wellhead in Eddy County to Midland, Texas via a connection with Plains.
The company further said that the Rustler Breaks Pipeline System without any significant additional capital investment is sufficient to cover increasing volumes from its anchor customer Matador Resources and other producers.
San Mateo is a joint venture, which was created by Matador Resources and a subsidiary of Five Point Capital Partners in February 2017, to operate and expand midstream assets in the Delaware Basin.
Matador Resources chairman and CEO Joseph Foran said: “Placing the Rustler Breaks Pipeline System into service is another significant accomplishment for our midstream joint venture, San Mateo. With the Rustler Breaks Pipeline System in service, Matador currently has approximately 65% of its operated Delaware Basin oil production on pipeline, which provides added reliability and operational advantages.”