#USA #Dallas #Tailwater Capital #Delaware Basin #Producers Midstream

Producers Midstream's Ambitious Phase Two Expansion

Overview
Producers Midstream II, LLC, a company backed by Tailwater Capital, has made a substantial announcement regarding the expansion of its infrastructure in the Delaware Basin. This expansion aims to enhance its operations significantly by increasing the processing capacity from 60 million standard cubic feet per day (MMscfd) to an impressive 90 MMscfd. Moreover, the company plans to introduce state-of-the-art acid gas injection (AGI) capabilities, which will be a substantial addition to its existing systems.

Strategic Agreements and Market Positioning
On July 22, 2025, Producers Midstream executed definitive agreements with leading operators in the Permian region, indicating strong partnerships that will facilitate this expansion. The move is critical not only for the company but also serves the growing demands for natural gas processing in Lea County, New Mexico. This strategic step aligns with Producers Midstream’s goal of providing comprehensive midstream solutions across the United States while positioning itself as a key player in the burgeoning Delaware Basin area.

Enhanced Capabilities and Future Prospects
The anticipated operational date for the advanced system is set for Q4 2025. The upgraded infrastructure is designed to process a wide range of gas compositions, such as hydrogen sulfide (H₂S), carbon dioxide (CO₂), and nitrogen (N₂), which are prevalent in the region. This capacity expansion builds on the success of its first phase, which went live only eight months after the investment decision was made, demonstrating the agility of Producers Midstream in responding to market demands.

"Strategically expanding our core operations enhances efficiency and maximizes the utility of our assets while providing immediate benefits to our stakeholders," stated Matt Flory, President and CEO of Producers Midstream. This affirmation highlights the company's commitment to operational excellence and customer satisfaction.

Long-term Commitments and Customer Partnerships
Producers Midstream has successfully secured long-term acreage dedications and volume commitments from several significant Permian operators, further paving the way for sustainable growth. Additional negotiations are ongoing to foster further development in the field. The company has also arranged long-term plans for residue gas and NGL takeaway to support these expanding operations effectively.

Investment and Growth Potential
Stephen Lipscomb, a partner at Tailwater Capital, emphasized the strategic nature of the expansion, stating, "Producers Midstream is committed to growing alongside our customers and delivering essential infrastructure solutions that meet the evolving needs of operators in this dynamic sector." This sentiment encapsulates the essence of collaboration and partnership that is vital for success in the midstream and energy domains.

About Producers Midstream and Tailwater Capital
Founded in 2016, Producers Midstream has built its reputation on maximizing operational value through tailored midstream systems that enhance reliability and predictability. The culture within the firm emphasizes service, ingenuity, and responsiveness, making it a trusted partner for many producers in the region.

Tailwater Capital, based in Dallas, is an exclusive private equity firm concentrating on energy and environmental infrastructure. With a track record of over 235 transactions valued at more than $26 billion, Tailwater's strategic partnerships with experienced management teams have facilitated the successful delivery of value-added solutions to the market.

Conclusion
As Producers Midstream embarks on this significant Phase Two expansion, it reinforces its position as a cornerstone in the Delaware Basin's energetic landscape. By enhancing processing capabilities and committing to innovation, the company not only meets the current needs of its clients but also sets the stage for future opportunities in the ever-evolving energy market.