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Chart of the month

Permian Basin water management spending is projected to swell, with produced water recycling accounting for much of the growth.

This month’s charts come from The Future of the Water Midstream, a report recently published by Global Water Intelligence. The charts depict how total expenditure on Permian Basin water management is projected to change between 2020 and 2025, adding around $4.3 billion.

A central conclusion of the report is that spending on produced water recycling will increase. Capital expenditure on centralized recycling facilities is expected to grow at a faster rate than any other market segment, with a compound annual growth rate of nearly 42% between 2020 and 2025. During this period, the percentage of produced water volumes sent to recycling will rise from 12% to more than 20%, and the share of hydraulic fracturing needs met through recycled volumes will increase from 20% to 47%.

This trend is expected to coincide with a drop-off in disposal via injection wells as that practice faces increasing constraints related to regulatory responses to induced seismicity and overpressurization concerns. As disposal challenges loom larger, recycling is forecast to emerge as an economical water management alternative, especially where freshwater scarcity is a problem and water can be treated at larger-scale, centralized facilities that gather volumes from and distribute to multiple clients.

Underpinning the expected upswing in centralized recycling will be the buildout and integration of pipeline networks throughout the Midland and Delaware sub-basins. This infrastructure development will not only simplify water transportation logistics and bolster the reliability of water distribution, but also contribute to the overall appeal of produced water reuse by reducing operating costs associated with traditional water sourcing and disposal practices.

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