Producers Midstream II has announced definitive agreements for a significant expansion of its Delaware Basin system, which will increase processing capacity by 50%.

This second-phase development will raise capacity from 60 million cubic feet per day (mcf/d) to 90mcf/d and include an advanced acid gas injection well.

The expansion, expected to be fully operational by the fourth quarter (Q4) this year, will enable the processing of a wider range of gas compositions including hydrogen sulphide (H₂S), carbon dioxide (CO₂), and nitrogen (N₂), ensuring consistent delivery to downstream markets.

This follows the successful first phase, which started operations in Q2, just eight months after the final investment decision (FID).

A portfolio company of Tailwater Capital, Producers Midstream’s phased development strategy allows for rapid and capital-efficient scalability by leveraging its existing asset base.

Producers Midstream president and CEO Matt Flory said: “Strategically expanding within our core footprint enhances operational efficiency, maximises asset utilisation, and provides immediate value to our customers and stakeholders.

“Located in a high-growth corridor of the Delaware Basin, this expansion provides critical infrastructure to support our partners' development objectives.”

Further expansion projects are being evaluated for quick deployment to meet growing demand.

To ensure full support for field development, Producers Midstream has also secured long-term residue and natural gas liquids takeaway agreements.

In December last year, Producers Midstream II secured a $400m expanded credit facility to support its strategic growth.

This initiative, led by Texas Capital Bank, Bank of Oklahoma, Cadence Bank, US Bank and Wells Fargo Bank, will fund development projects across the Mid-Continent/Eastern Permian Basin and new projects in the Delaware Basin.