Select Water Solutions Expands Permian Pipeline Network With $120M New Mexico Buildout

Select Water Solutions Expands Permian Pipeline Network With $120M New Mexico Buildout

Select Water Solutions will invest up to $120 million to build about 100 miles of pipeline and expand produced-water recycling and storage capacity in southeastern New Mexico, Engineering News-Record reports. The Gainesville, Texas-based company announced the plan Aug. 18.

Market Impact

The buildout is backed by an amended 12-year water-management agreement with a large oil and gas operator and will extend Select’s Northern Delaware network through Eddy and Lea counties, around the oilfield centers of Carlsbad and Hobbs, according to ENR. The system already includes more than 400 miles of in-service and under-construction pipeline, about 1.7 million barrels per day of fixed recycling capacity and 22.2 million barrels of storage across more than 1.5 million dedicated acres, per the company’s Aug. 5 quarterly filing cited by ENR.

Under the new agreement, Select will add another 3 million barrels of storage and 60,000 barrels per day of recycling capacity, while also handling produced-water gathering and disposal and treated-water supply and distribution. The contract covers about 500,000 dedicated acres plus 375,000 acres subject to rights of first refusal. Select Chairman, President and CEO John Schmitz said the customer has worked with the company since anchoring its first permanent recycling facility in the Northern Delaware Basin in late 2023, ENR reported.

This is the latest in a string of expansions. In February, the Carlsbad City Council approved a permit for a separate 15-mile Select pipeline, and a Bureau of Land Management review is underway for buried produced-water and treated-water lines about 29 miles northeast of Carlsbad. On Aug. 4, Select announced a separate seven-year deal conveying 14 saltwater disposal facilities in Eddy and Lea counties, with plans to invest $25 million to $30 million and build 19 miles of pipeline to connect them, carrying a 128-million-barrel minimum-volume commitment, according to ENR.

What It Means for Subcontractors

• Large-diameter pipeline crews should expect continued work across Eddy and Lea counties, New Mexico, and Culberson County, Texas, as Select layers new gathering and distribution lines onto its existing 400-plus-mile network.
• Companies with recycling facility construction experience have a track record to point to: Select’s prior Northern Delaware projects have ranged from a $10-11 million, 100,000-bbl/d facility in 2023 to a 2025 project pairing two recycling plants with 100 miles of pipeline, suggesting similar-scale packages may follow this $120 million commitment.
• Saltwater disposal well integration work is active now: Select’s Aug. 4 deal alone calls for 19 miles of new pipeline connecting 14 acquired disposal facilities, and the company holds an option on additional disposal wells in Lea and Culberson counties that could generate further tie-in contracts.
• Firms working in BLM-jurisdiction areas should track the pending federal environmental review for buried water lines about 29 miles northeast of Carlsbad, as approval could open a new construction package on federal land.
• Contractors near Carlsbad’s Well Protection Zone should note the city’s permitting standard requiring greater pipeline depth and thickness within that zone, a specification likely to apply to future Select projects crossing the area.