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Concho forms JV to expand water recycling in Permian Basin

Concho Resources Inc. established a joint venture with Solaris Water Midstream LLC that will enable the oil and gas company to increase its water recycling operations in the Permian Basin.

The two companies struck a long-term produced water management deal, under which Solaris Water will manage Concho's produced water gathering, transportation, disposal and recycling for roughly 1.6 million acres located mainly in Eddy County, N.M., according to a July 31 news release.

Concho is also providing 13 saltwater disposal wells and about 40 miles of large-diameter produced water gathering pipelines in exchange for cash and a stake in Solaris Water's parent Solaris Midstream Holdings LLC. Solaris Water will integrate the assets into its Pecos Star water infrastructure system, which serves the northern Delaware Basin.

Solaris Water will deliver blended reuse source water to Concho, allowing the producer to expand its use of recycled water in the Permian.

Concho is one of the largest unconventional shale producers in the Permian. Solaris Water owns and operates water midstream assets across the production area.