Energy Transfer, Sunoco Combine Assets with Permian Basin Joint Venture

Energy Transfer and Sunoco entered a joint venture on July 1, 2024, to combine respective crude oil and produced water-gathering assets in the Permian Basin. Energy Transfer will operate the joint venture and add its Permian crude oil and water gathering assets and operations, while Sunoco will contribute its crude oil gathering assets.

Energy Transfer’s long-haul crude pipeline network—excluded from the joint venture—transports crude oil from the Permian Basin to Nederland, Houston, and Cushing. The joint venture will operate more than 5,000 miles of crude oil and water gathering pipelines with a crude oil storage capacity over 11 million barrels. Suncoco will hold a 32.5% interest and Energy Transfer will hold a 67.5% interest in the joint venture.

Permian Basin joint venture system map; Image Credits: Business Wire

In May 2024, ExxonMobil Corp. finalized its merger acquisition of Pioneer Natural Resources (PNR), adding to the company’s significant development potential in the Permian basin. Following the acquisition, the merged company owns more than 1.4 million net acres in the Delaware and Midland basins with approximately 16 billion barrels of oil equivalent resources.

Based on 2023 volumes, ExxonMobil’s production in the Permian basin will more than double to 1.3 million barrels of oil equivalent per day (MOEBD). Based on initial estimates, it is expected to increase to approximately 2 MOEBD in 2027. The merger combines PNR’s differentiated Permian inventory and basin experience with ExxonMobil’s technologies, financial resources, and project execution. These combined aspects are expected to produce double-digit returns through efficient, increased resource recovery with a lower environmental impact.

In its Permian unconventional operations, ExxonMobil plans to reach net-zero Scope 1 and Scope 2 greenhouse gas (GHG) emissions by 2030. The company will utilize its Permian GHG reduction plans to advance PNR’s Scope 1 and 2 net-zero emissions goal by 15 years. It will also apply technologies for monitoring, measuring, and addressing fugitive methane to decrease the merged companies’ emissions. Combined operating capabilities and infrastructure may allow ExxonMobil to increase the amount of recycled water used in Permian fracturing operations to more than 90% by 2030.

In October 2023, Milestone Carbon announced the development of a CO₂ sequestration hub in the southwestern region of the Midland Basin, containing multiple support wells throughout Upton and Midland counties for the permanent geological storage of CO₂.

The company has been granted exclusive rights to more than 10,000 acres of land and pore space for the development of this carbon-capture hub. In addition to land rights, Milestone Carbon received a Class II injection well permit from the Texas Railroad Commission, allowing the company to transport carbon from local natural gas producers for sequestration. The Midland Basin project is slated to begin CO₂ injection in 2025, pending construction time and commercial arrangements with participating emitters.

Milestone Carbon applied for an additional Class VI injection well permit to increase sequestration capacity and draw from a widened scope of industrial sources. Based on the geological investigation completed to date, the company estimates that the Midland Basin hub should have sufficient capacity to store approximately 30 million metric tons of CO₂ over its life. Both Class II and Class VI injection wells will be utilized to sequester CO₂.