Producers still own the majority of disposal wells in each basin; however, data shows that third parties are edging in on actual disposal
This month’s charts feature data from Rystad Energy’s September shale webinar. The energy intelligence firm predicts a 20% growth in the US water disposal market for the 2019-2022 period, with overall disposal reaching around 13.7 billion bbl. This growth is expected to occur primarily in the Permian Basin, where frack water demand will continue to fall short of produced water volumes.
The first chart shows the 2018 share of saltwater disposal wells (SWDs) owned by exploration and production (E&P) companies and third-party companies such as water midstream firms and independent SWD operators. Though there is an increasing trend in the transfer of water infrastructure from producers to midstream companies, the former group clearly operates the majority of SWDs in these basins.
However, actual disposal does not necessarily fall in line with the ownership breakdown. The second chart illustrates that, while E&Ps account for the majority of disposal in the Permian, third-party injection outpaces producer disposal in the DJ Basin and Eagle Ford play. Rystad notes that the third-party market is rather consolidated in these latter two areas, with major water midstream company NGL responsible for a large portion of total disposal.
If producers continue to warm to the notion of their water being managed by third-party midstream companies, we can expect their SWD market share and disposal to decrease in the coming years.