Infrastructure: Bringing 

the Next Wave to 

Water Management

Michael Dunkel 

Vice President - CH2M 

September 24, 2015 
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•Water infrastructure examples 

•Economics of infrastructure building 

•How the buildout will unfold 

•Benefits for oil & gas companies 

•Benefits for water treatment companies 

Outline 
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Alternatives to Water Infrastructure 

•Close-in groundwater source wells 

•Nearby Saltwater Disposal Wells (SWDs) 

•Trucking source and produced water 

SWD next to tank battery 
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Limitations of No Water Infrastructure 

•Limited flexibility 

•Risk running out of water 

•Risk of disposal limitations 

•Cost increases with higher rig activity 
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• Construction through 2019 

• 20 subsystem networks 

• 125+ water storage ponds connected 

• Non-fresh source water from Odessa 

and potentially Midland’s effluent water 

• $100 million in 2015 on water 

infrastructure 

Pioneer Natural Resources - 

Source Water Infrastructure 100+$Miles$

60+$Miles$
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•Haynesville Water Midstream Network 

– 60-mile delivery & gathering system - LA to TX 

– 90,000/bbl per day capacity - 8 SWDs. 

•McKenzie County (ND) Water Midstream Network 

– 150 mile water delivery and gathering system - construction 

2015 

– $125 - $150 million capital project 

•30-50% lower Op costs 

Nuverra Environmental 

Water Gathering Systems 
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• Network to gather flowback and produced water 

• Allows Water Recycling 

• Saved 80,000 truck trips in 2014 

Anadarko Water Infrastructure in Marcellus 
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•System links 13 SWDs in McKenzie 

and Mountrail Counties 

•Injection averages 80,000 BPD 

•Will have 120 miles of network by 

this fall 

•1804 is the largest disposal company 

in ND 

1804 Operating in N. Dakota 
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WV Water Treatment plant 

and infrastructure 

•August announcement plans for a 60,000 

BPD water treatment plant 

•Desalination process by crystallization 

•$275 MM Capex cost; two years to build 

•Plant will be owned by Antero 

•5-mile pipeline will connect to existing 

pipeline system 
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Eureka Resources in Pennsylvania

•20k BWPD capacity Wastewater treatment in 

Williamsport, PA 

•Second facility commissioned in Bradford County, Pa 

in 2014 - includes a crystallizer 

•Water is trucked in and out of facility 
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Payout on Water Infrastructure 

• Trucking versus Pipeline Installation 

• 10-mile 12” diameter HDP buried pipe with a capacity of 

35,000 BWPD could cost ~$3 million 

• Assume only 1⁄2 of the capacity is used, or 17,000 BWPD 

• Assume that local trucking costs for 10 miles is $1.50/

BW 

• Operating cost for pipeline is 3 cents/BW 

• Payback is in four (4) months 

• Pipeline could last 20+ years 
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Process of Building Shared Infrastructure 

• 3 fields & 3 sets of 

partners combined to 

pay for the pipeline 

• Once built, more fields 

can be added over 

time
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• Major water source in 

southern area designs project 

to move water to NM. 

• First movers in pipeline and 

buyers take risk but control 

future delivers 

Infrastructure Onshore Hypothetical 
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•Initial buyers build network to 

deliver to wells (mauve) 

• Second phase network to 

move water where needed in 

white (lower risk to new buyer, 

but profitable initial 

companies) 

Onshore Growth of Infrastructure 
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• Changing rig schedules and strategic plans 

• Costs are front loaded 

• Fractionated ownership of mineral interests 

• Right-of-way access 

• Medium to longer term time horizon required 

• Not the traditional “core business” for oil companies 

Challenges of Water Infrastructure 
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• Lower water costs 

• More flexibility 

• Easier to have multiple water supply options 

• Lower community impacts 

– Fewer trucks on the road 

– Easier to substitute brackish for fresh water 

• Easier to recycle 

Benefits to Oil & Gas Companies 
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• More recycling with infrastructure 

• Larger volumes of water in one place to allow lower 

treatment costs / bbl

• Longer term commitments by oil companies 

• Better business opportunities 

Benefits to Water Treatment Companies 
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Let’s build more water infrastructure!! 
Thank You