Producers Midstream II, LLC, a portfolio company of Tailwater Capital focused on providing a full suite of midstream solutions to customers across the U.S., announced the execution of definitive agreements with leading Permian operators to significantly expand its gathering, treating, and processing infrastructure in Lea County, New Mexico.
This Phase Two expansion of the company's Delaware Basin system will increase processing capacity by 50%—from 60 MMscfd to 90 MMscfd—and introduce a state-of-the-art acid gas injection well.
Expected to be fully operational by Q4 2025, the enhanced system will offer expanded processing capacity and will be equipped to handle a broad range of gas compositions, including hydrogen sulfide (H₂S), carbon dioxide (CO₂), and nitrogen (N₂), ensuring consistent downstream market delivery. This expansion builds on the successful first phase of the development, which became operational in Q2 2025—only eight months after the final investment decision. Producers Midstream's phased development strategy enables rapid, capital-efficient scalability by building upon its existing asset base, and the Company continues to evaluate further expansion projects that can be rapidly deployed.
"Strategically expanding within our core footprint enhances operational efficiency, maximizes asset utilization, and provides immediate value to our customers and stakeholders," said Matt Flory, President and CEO of Producers Midstream. "Located in a high-growth corridor of the Delaware Basin, this expansion provides critical infrastructure to support our partners' development objectives."
Producers Midstream has secured long-term acreage dedications and volume commitments from several premier Permian operators, with additional commercial discussions underway to support further growth. In concert with the customer commitments, Producers Midstream has secured long-term residue and NGL takeaway to fully support field development.
"This expansion is another testament to Tailwater and Producers Midstream's focus of growing with our customers," said Stephen Lipscomb, Partner at Tailwater Capital. "Producers Midstream is delivering critical infrastructure solutions to meet the needs of operators in one of the most dynamic areas of the Delaware Basin."
