MIDLAND, TEXAS, DECEMBER 14, 2016 -- The City of Midland and Pioneer Natural Resources signed a historic agreement that will upgrade the City's infrastructure while saving millions of gallons of freshwater.
Midland City Council approved a private-public partnership with Pioneer at this week's regularly scheduled meeting that will allow the company to make improvements to the City's wastewater treatment plant in return for supply of reclaimed water from the plant for oil and gas development in the Midland Basin. Pioneer was selected as the City's partner in this endeavor through a proposal process. Following the City Council meeting, the City and Pioneer executed the contract for the project.
"This partnership is a win-win for residents and our area's water security moving forward," said City Manager Courtney Sharp. "Our agreement with Pioneer is a perfect example of how public and private entities can maximize their resources by working together."
"Pioneer is focused on efficiency in every aspect of our business, and water use is no exception," said Pioneer President and COO Tim Dove. "Our agreement with Midland moves Pioneer toward its goals of significantly reducing the use of freshwater in our operations and creating a reliable, long-term source of water. We appreciate Mayor Morales, Midland City Council and City Manager Sharp for their partnership, as well as the support of Representative Tom Craddick and Senator Kel Seliger for this landmark project. Pioneer is pleased to play a leading role in conserving freshwater in the Midland Basin."
Under the agreement, Pioneer will provide $110 million in upgrades to the plant, which would have otherwise been paid for through the City of Midland's utilities fund. In return, the City of Midland will provide Pioneer reclaimed wastewater for reuse. The water will be transported on Pioneer's water distribution system in the Midland Basin and used for hydraulic fracturing. Utilizing effluent water for this purpose significantly reduces Pioneer's need for freshwater and makes productive use of a non-potable resource at a lower overall water cost.
The volume-based contract is expected to last for the next 20 to 28 years, depending on flow rates. Upon legislative validation from the State of Texas and completion of the plant's design, construction is expected to take approximately two years.