Producers Midstream II, LLC, a portfolio company of Tailwater Capital, has announced plans to construct a new gathering, treating, and processing system in Lea County, New Mexico. Situated in the core of the Delaware Basin, one of the most active oil and gas regions in the U.S., the system will be a significant addition to the area’s infrastructure. The initial phase will leverage existing assets owned by the company, with an expected in-service date of the second quarter of 2025.
The first phase of the project involves relocating an existing 60 million standard cubic feet per day cryogenic processing plant owned and operated by Producers Midstream. Additionally, the project will include the construction of an acid gas injection well and the installation of over 40,000 horsepower of compression equipment, all of which are currently in Producers Midstream’s inventory. The company also has the capacity to expand the processing plant to 90 MMscfd to support increased demand, and an additional 150 MMscfd cryogenic processing plant in inventory that could be relocated to the area.
“The construction of this system is central to our long-term strategy of providing scalable and efficient midstream solutions in the Delaware Basin,” said Matt Flory, president and CEO of Producers Midstream. “By strategically positioning assets and expanding capacity, we are equipping operators with the infrastructure needed to support ongoing and future development in this rapidly growing area.”
Producers Midstream has already secured definitive agreements with multiple parties, obtaining both acreage dedications and volume commitments to support the development. The company is also actively negotiating with additional operators and is ready to expand capacity as necessary to meet the growing demand driven by aggressive drilling plans in the region.
Stephen Lipscomb, Partner at Tailwater Capital, commented on the project’s phased approach: “This development strategy allows us to repurpose idle assets in an area with immediate gas infrastructure needs. Producers Midstream is uniquely positioned to quickly provide solutions for its customers, with the ability to scale operations over time as customer requirements grow.”
For more information visit www.producersmidstream.com
