Lubbock-based Palisade Pipeline scored its first victory as a startup little more than a year ago with a timely idea to build an infrastructure system that could pipe reclaimed water to the Permian’s oilfields. Reliance on fresh water by producers in the desert-like environs of West Texas and N.M., had already become a growing, hot-button issue with an average use in 2019 of 33.6 million gallons a day for fracking operations. So, Palisade approached the city of Lubbock and offered to buy up to 6 million gallons per day of wastewater, which then would be resold to Permian oil and gas producers.
Palisade Pipeline
Palisade Pipeline LLC is a pipeline developer and operator providing innovative and environmentally conscious water solutions in the Permian Basin, focusing on the Northern Delaware and Northern Midland service areas. Palisade will offer operators and other stakeholders in Texas and New Mexico a large scale, uninterrupted source of non-potable, sustainable city reclaimed water giving our customers confidence in their operations while at the same time knowing that each gallon of Palisade water conserves groundwater sources. Palisade’s long term commitment to the stake holders of the Permian Basin will give its partners the ability to preserve an estimated 70 million barrels per year or 1.75 billion barrels of groundwater over the life of the project.
Lubbock bit, and Palisade went a-courting for financing.
With agreement in hand, Palisade approached private equity firm Macquarie Capital last October to fund the large-scale reclaimed water system. The metrics of the “ground-breaking” project looked inviting. The company’s only competitors in the area pump groundwater. The Palisade Pipeline would conserve an estimated 3 billion gallons of fresh water a year, or 73 billion gallons over the life of the project, in a time of hurried environmental goals. Construction would take a short six months. The company team included veteran midstreamers in government regulations, energy infrastructure, and large-scale engineering.
Boom. Funding secured. Get busy.
And that’s exactly what Palisade set off to do with its eyes fixed on Permian oil and gas production. But after speaking at a February water in energy conference, the company’s vice president of operations recognized a broader customer universe existed for the proposed project; namely, industries and agriculture that have traditionally relied on fresh water for their operations but now are implementing sustainability goals and need help meeting them. Production slowdown in the Permian soon followed that conference, which also amplified the need for Palisade to diversify its customer base, which it has. Palisade now is forging ahead with its plans to build an environmentally superior water pipeline solution to the Permian and expects completion of its system by late next year.
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