One Million Barrels a Day: WaterBridge Goes for Broke

WaterBridge opens commercial bids for a 500,000 bpd pipeline that could push its Delaware Basin system to 1 million bpd

6 Apr 2026

WaterBridge launched a binding open season on Feb. 23 for the second phase of its Speedway Pipeline, seeking long-term commitments to move up to 500,000 barrels per day of produced water from southeastern New Mexico to disposal sites in West Texas, as drilling pressure on the Northern Delaware Basin's water infrastructure continues to mount.

The commercial process, open through April 20, invites oil and gas producers to contract capacity on a large-diameter pipeline running from Eddy and Lea counties to the Central Basin Platform. Phase II, if fully subscribed, would match the output of Phase I, now under construction and scheduled to begin service in mid-2026, giving the combined Speedway system a total throughput capacity of 1 million barrels per day. Company officials said the project draws on more than 273,000 surface acres controlled by affiliate LandBridge, which provides the underground pore space that makes long-range disposal economically viable.

The rationale is largely structural. Drilling activity across the Northern Delaware is accelerating, and local injection capacity is straining under rising volumes and tightening pore pressure constraints, a combination that has pushed operators to seek flow assurance beyond basin boundaries. WaterBridge's model offers minimum volume commitment contracts averaging more than a decade in length, providing producers with a degree of certainty that short-term disposal arrangements cannot.

Demand for Phase II exceeded early projections, the company said during its fourth-quarter 2025 earnings call, echoing the oversubscription that characterized Phase I's open season. WaterBridge has allocated roughly $100 million of its $430 to $490 million 2026 capital budget to early Phase II development, with incremental earnings contributions targeted for 2027. The company has also signaled the possibility of a Phase III, though whether basin production volumes will sustain that pace through the decade remains an open question as commodity cycles and regulatory scrutiny of produced water disposal both remain in flux.

Whether the Speedway buildout ultimately reshapes how the Permian manages its water problem may depend as much on policy and geology as on commercial ambition.