Producers Midstream II, LLC, a portfolio company of Tailwater Capital, has announced the construction of a new gas gathering, treating, and processing system in Lea County, New Mexico. This strategic move positions the company at the heart of the Delaware Basin, one of the most active oil and gas producing regions in the United States.
The initial phase of the project involves repurposing existing assets, including a 60 million standard cubic feet per day (MMscfd) cryogenic processing plant, an acid gas injection well (AGI), and over 40,000 horsepower of compression equipment. These assets, currently owned by Producers Midstream, will be strategically relocated and integrated into the new system.
The project is expected to be operational by the second quarter of 2025, providing immediate infrastructure solutions for the region. The company is actively negotiating with additional operators and has the capacity to expand the system to meet the aggressive drilling plans in the county.
Producers Midstream can quickly increase the plant’s capacity to 90 MMscfd to accommodate future customer needs. They also have an additional 150 MMscfd cryogenic processing plant available in the Texas Panhandle, ready to be relocated to this area for further expansion.
“The construction of this system is a key part of our long-term strategy to provide 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’re equipping operators with the infrastructure they need to support ongoing and future development in this rapidly growing area.”
Stephen Lipscomb, Partner at Tailwater Capital, highlighted the project’s strategic significance: “This phased development approach allows us to strategically repurpose existing, idle assets to an area in the Delaware basin that has significant, immediate gas infrastructure needs. The Producers Midstream team is in a unique position to quickly provide their customers with solutions, but also has the capability to scale with these customers over time.”
Producers Midstream is committed to providing reliable and efficient midstream solutions for their customers. The company’s focus on innovation and responsiveness allows them to deliver bespoke systems that optimize producer operations.
Tailwater Capital, a Dallas-based energy and growth infrastructure private equity firm, supports Producers Midstream’s efforts. With a proven track record of investing in value-added solutions, Tailwater has raised over $4.7 billion in committed capital since its inception and executed over 180 transactions representing over $26 billion in value.
