Producers Midstream to relocate existing gas processing system assets to Delaware basin

Producers Midstream II LLC is constructing a new gas gathering, treating, and processing system in Lea County, New Mexico, in the Delaware basin with the initial build-out utilizing existing plant, treating, and compression assets owned by the company.

The first phase, expected to be in-service by second-quarter 2025, includes relocating an existing 60 MMscfd cryogenic processing plant owned and operated by Producers Midstream, constructing an acid gas injection well (AGI), and installing more than 40,000 hp of compression equipment, all currently owned in inventory by Producers Midstream.

The plant capacity can be “quickly” increased to 90 MMscfd to support additional customers, the company said. Producers Midstream also has an additional 150 MMscfd cryogenic processing plant in inventory in the Texas Panhandle that is available for relocation to the area.

The company has entered into definitive agreements with unnamed parties, securing both acreage dedications and volume commitments to support the development, it said. Additional details were not provided. Negotiations with additional operators are ongoing, the company said.

Producers Midstream is a portfolio company of Tailwater Capital.