H2O Midstream said Oct. 23 it signed a long-term water services agreement with a subsidiary of Legacy Reserves Inc. (NASDAQ: LGCY) to handle the E&P’s produced water needs in the Permian Basin.

Under this agreement, H2O Midstream will gather, dispose and redeliver for reuse produced water from several of Legacy’s horizontal wells in Howard County, Texas.

Dan Westcott, Legacy’s president and CFO, said the company expects the agreement with H20 will improve full-cycle water costs as well as reduce its environmental footprint and promote safety.

“We made the decision to enter into a long-term relationship with H2O Midstream to outsource a portion of our produced water needs due to the reliability and efficiency of their water hub infrastructure and interconnected water gathering system,” Westcott said in a statement.

The agreement expands on third-party produced water delivery services H20 Midstream is already providing from the company’s water hub infrastructure hub in Howard to Legacy for its hydraulic fracturing operations.

The H20 Midstream hub in Howard is the first third-party, truck-free produced water storage and disposal hub in the state of Texas, according to the company press release.

Under its agreement with Legacy, H20 Midstream will be able to offer the company multi-source water options that will help lower operating costs, said Darrell Bull, executive vice president and chief commercial officer of H20 Midstream.

“We are able to offer our customers the option of redelivery of their own produced water, sales of third-party produced water, or transportation of excess produced water via pipeline into third-party disposal wells,” Bull said in a statement.

The H20 Midstream water hub infrastructure consists of two 500,000 barrel ponds connected to a network of 13 disposal wells totaling 265,000 barrels per day of capacity via a pipeline network of more than 150 miles.

“We are excited to gain Legacy’s trust and are committed to helping our operating customers achieve cost savings by lowering lease operating costs and reducing capital while delivering reliable, safe and sustainable operations,” H2O Midstream CEO Jim Summers said in a statement.

Onshore