The way of water

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XRI’s sustainable water solutions are revolutionizing the water midstream industry

As the oil and gas industry progresses towards a more environmentally friendly future, companies in the sector are seeking innovative environmental, social and corporate governance (ESG) solutions to a variety of issues. Water is a necessary component of several resource extraction methods, from oil sands mining to hydraulic fracturing and other processes, and its handling is one of the industry’s most important environmental issues.

“Historically, if you look at the oil and gas industry as a whole, or specifically in the Permian Basin, which is the most profitable shale basin in the United States, the way water is managed and sourced has always been fragmented,” explained Dr. Chris Harich, chief operating officer of XRI.

On the forefront of midstream water management and reclamation, the ambitious portfolio company of Morgan Stanley Energy Partners brings ingenious technological solutions to the cost effective and sustainable use of completion fluids in the sector. (In industry parlance, water is referred to as ‘completion fluid’ and ‘production water’ because it is required in the development of wells, and is also a by-product of oil and gas production.)

Harich, who holds a PhD in Water Resource Engineering from the University of Southern California, recalled that when the company initially set up shop in Midland, Texas in 2013, the western and central parts of the state were gripped by drought and beset by wildfires that were straining the area’s water infrastructure. At the time, XRI’s main business focused on finding and developing brackish groundwater sources.

“Cities that relied heavily on groundwater were running out of fresh potable water. We saw how the drought was straining supply, and we decided to build a business that didn’t rely on fresh water,” he said.

That pivot changed the company’s trajectory.

“Now, with the growth of produced water recycling and reuse in our business, we’re bridging the gap between different operators and leveraging our infrastructure to do that,” Harich said. “Our approach not only follows the ESG-friendly ability to reuse and recycle water, but also helps the industry as a whole.”

XRI’s arsenal of water solutions includes large-scale water treatment, produced water reuse and recycling facilities, water exchange terminals and a daily capacity of 1 million barrels of water. They are one of the first firms of their kind to integrate a midstream water infrastructure, engineering a network composed of water exchange terminals and over 300 miles of buried large diameter pipe systems.

“We can treat, reuse and then redistribute water to multiple customers along our pipe network, which allows for an advancement of a more regionalized access to recycled and reused water that wasn't there before,” Harich said. “With these water exchange terminals we can blend with brackish water, use more produced water, and supply the industry with any kind of water quality that they want for their completions on each site.”

In a unique move within the sector, XRI works with a variety of midstream O&G companies to use their produced water, which under typical circumstances would be injected back into the ground.

“Being the first mover, we concentrated on infrastructure and then switched gears to concentrate on bringing more produced water into our system. It became very fortuitous. We can realize a more regionalized aspect for infrastructure, and we can introduce more and more customers to this reused water,” Harich said. “It’s bringing more customers together because we're taking produced water which would have been waste from one customer, treating it, cleaning it up, reusing it, and giving it to another customer down the line.”

“As a community we spend millions of dollars getting that water out of the ground, so there's no reason just to move it a little ways over and put it back into the ground. Let’s reuse it for a little while and keep it in the water cycle. That drives less down hole cost.”

Injecting production water back into the ground is extremely costly, and XRI eliminates that financial burden.

“We believe that truly helps the whole oil and gas community to be better environmental stewards across the basin because we're not only protecting aquifers or reusing a resource that's already there, we're driving value to the customer and value from a dollar perspective and saving people money. XRI has done very well in that regard,” Harich said.

Efficiencies have grown dramatically since XRI’s inception.

“We see that reusing water is not going to strain the aquifers, it's not going to constrain the public water supply, it's the environmentally responsible thing to do, and we can keep growing by doing it,” Harich said. “We don’t need to be drilling water wells all over the place. We can reuse, recycle, and bring in more equipment and more technology to satisfy the growth that we see in the Permian basin.”