Oryx Midstream Services has plans to build a 220-mile crude oil transportation pipeline serving New Mexico's Delaware Basin that will run from Carlsbad to Midland, Texas.

The Midland, Texas-based oil company announced Monday it had closed on a long-term regional oil transportation agreement with WPX Energy (NYSE: WPX) and other producers for 300,000 acres that will be dedicated to the project. The pipeline will have the capacity to transport up to 400,000 barrels of oil per day, according to the company.

"As ongoing improvements are made in drilling technologies and rig counts in the Delaware Basin increase, production growth from Oryx’s customer base, including WPX, continues to be strong," said Oryx CEO Brett Wigg in a statement. "With this strong production growth comes transportation bottlenecks, an issue that this new pipeline will address, providing much-needed takeaway capacity in the area."

Oryx said construction has begun on the pipeline that the company expects to be completed by the end of next year. When complete, it will serve production from every active county in the Delaware Basin including Lea and Eddy counties in New Mexico, according to Oryx.

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