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July 22, 2025

Producers Midstream Secures Strategic Commitments for Phase Two Expansion in the Delaware Basin

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Producers Midstream Secures Strategic Commitments for Phase Two Expansion in the Delaware Basin

News provided by Producers Midstream

Jul 22, 2025, 09:00 ET

Enhancement Will Increase Processing Capacity to 90 MMscfd and Introduce Advanced Acid Gas Injection Capabilities

DALLAS, July 22, 2025 /PRNewswire/ — Producers Midstream II, LLC (“Producers Midstream” or the “Company”), a portfolio company of Tailwater Capital focused on providing a full suite of midstream solutions to customers across the U.S., today 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 (“System”) will increase processing capacity by 50%—from 60 MMscfd to 90 MMscfd—and introduce a state-of-the-art acid gas injection (“AGI”) 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.”

About Producers Midstream
Founded in 2016, Producers Midstream is committed to maximizing the value of our producer’s operations by creating bespoke midstream systems, capable of increased reliability and predictability, supported by our culture of service, ingenuity, and responsiveness.

About Tailwater Capital
Dallas-based Tailwater Capital is an energy and environmental infrastructure private equity firm with a well-established track record of working constructively with proven management teams to deliver value-added solutions. Tailwater has raised more than $5 billion in committed capital since inception and the team has executed more than 235 transactions representing over $26 billion in value. For more information, please visit www.tailwatercapital.com.

Producers Midstream Contacts
Hudson White
Chief Financial Officer Phone: 214-238-5750
Email: [email protected]

Clark Hudnall
Chief Strategy Officer
Phone: 214-238-5754
Email: [email protected]

Tailwater Contacts
Jill McMillan
Managing Director, Communications & Public Affairs Phone: 214-489-7047
Email: [email protected]

John Schaufele
Managing Director, Investor Relations & Fundraising Phone: 214-489-7043
Email: [email protected]

SOURCE Producers Midstream

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