Permian Gas Processing Buildout Continues, With a Tilt Toward the Delaware

rbnenergy.com  Tuesday, 08/18/2026  Published by: Housley Carr

Link to full article with graphs:  https://rbnenergy.com/daily-posts/blog/permian-gas-processing-build...

Since the start of 2022, more than 12 Bcf/d of new gas processing capacity has come online in the Permian, about half of it in the Midland Basin and half in the Delaware. That unprecedented, multibillion-dollar buildout will be continuing without let-up through early 2029, and the shift toward the gassier Delaware — seen by many operators as offering a longer runway for future growth — is picking up steam. In today’s RBN blog, we’ll discuss the latest tranche of gas processing plants under development in the Permian and what these projects reveal about production growth trends in the world’s most prolific stacked play.

Things are looking up for Permian natural gas. After an extended period of pipeline takeaway constraints and negative gas prices at the Waha Hub, the situation for producers and marketers has been improving as new takeaway capacity has come online, first in June with the official startup of the 570-MMcf/d expansion on the now-2.55-Bcf/d Gulf Coast Express (GCX). More recently, our weekly NATGAS Permian report has cited initial flows on both the Hugh Brinson Pipeline (Phase 1 capacity of 1.5 Bcf/d) and the Blackcomb Pipeline (ramping up to 2.5 Bcf/d of capacity over the next few months).

With the untangling of the takeaway logjam — and still more pipeline capacity on the way, including Hugh Brinson’s Phase 2 next year and Eiger Express in 2028 — Waha prompt-month and cash prices have turned positive, and we expect they will stay there for some time. (See our recent Fly Like an Eagle for more.)

All that’s given new confidence to crude-oil-focused producers in West Texas and southeastern New Mexico, whose wells also churn out massive volumes of associated gas that needs to be run through gas processing plants. As we’ve discussed in many a blog over the past several years, operators in the Midland and Delaware basins have been in a constant struggle to stay one step ahead on the gas processing front — that is, to be sure they will have sufficient processing capacity in place as new production starts up.

If anything, that challenge has become even more, well, challenging over the past couple of years as the lead time for key, in-demand processing plant components like brazed aluminum heat exchangers (aka “cold boxes”) and turbo-expanders has increased. “Lead times definitely have gotten extended,” Pat McDonie, Targa Resources’ president of gathering and processing, said during the midstream giant’s August 6 earnings call. “A lot of it is around the electrical infrastructure for the plant. ... Frankly, we’ve adapted to that.”

With takeaway constraints easing, Waha prices well north of zero, and dry-gas production in the Permian approaching a record 23 Bcf/d, we thought it would be a good time to discuss the latest round of gas processing project announcements and what they say about where things stand — and where they are headed.

Figure 1 above provides a big-picture view. Just under 6 Bcf/d of new processing capacity has come online in the Midland Basin over the past four years and seven months (orange bar segments to mid-2026) and just over 6 Bcf/d has started up in the Delaware, most of that on the Texas side of the sub-basin (dark-blue bar segments) but increasing amounts in southeastern New Mexico’s Lea and Eddy counties (light-blue bar segments). More than 6 Bcf/d of additional Permian processing capacity is slated to start up by Q1 2029 and, as you can see from the flattening out of the orange bar segments in mid-2027, most of these more recently announced projects will be sited in the Delaware.

Figure 2 below zooms in on the specific projects being planned: their names, owners, capacities and online dates, plus the sub-basin in which they will be sited (Midland, Delaware-TX or Delaware-NM). Enterprise Products Partners and Targa Resources lead the pack, each with five new plants in the queue; Enterprise, whose projects are slightly larger (300 MMcf/d each compared to Targa’s 265 MMcf/d or 275 MMcf/d) is tops in total planned capacity (1.5 Bcf/d compared to just under 1.4 Bcf/d for Targa). Others with multiple Permian processing plants in the works include Phillips 66 and Brazos Midstream (each with two 300-MMcf/d plants) and ONEOK, with one 400-MMcf/d project (recently upsized from 300 MMcf/d) and two expansion projects with a combined 110 MMcf/d of incremental capacity.

As we’ve been hinting at, the new-plants list is dominated by projects in the Delaware Basin: 12 projects (including the two ONEOK expansions) totaling just over 3.1 Bcf/d on the West Texas side and six new plants with just over 1.5 Bcf/d on the New Mexico side. The plant-building pace in the Midland has been slowing — only five new plants with a combined 1.5 Bcf/d of capacity are planned there. Processing-plant developers’ increasing focus on the Delaware Basin reflects what we discussed in some detail a few months ago in Long Time Comin’. There, we said that the improving outlook for stronger, reliably positive gas prices at Waha would be a boon to the many Permian producers whose bottom lines have been hurt by sub-$1 or, quite often, negative prices at the West Texas gas hub. (Note that producers with sufficient takeaway capacity and/or long-term deals with LNG exporters have been affected far less.)

We also said the most obvious initial impact will be improved production economics in the gassier parts of the Permian, especially the western Delaware, where gas-to-oil ratios (GORs; measured in Mcf/bbl) are generally higher (red- and orange-shaded areas in Figure 3 below) than those in the eastern Delaware and most of the Midland (yellow- and green-shaded areas).

When gas prices at Waha were very low or negative, Delaware producers tended to favor development in the less-gassy parts of the sub-basin, though we should emphasize that their primary driver has always been the crude oil resource — that’s where the money is, after all. Now, with easier pipeline egress out of the Permian at hand and stronger Waha gas prices on the horizon, we expect producers’ interest in the gassier parts of the Delaware to accelerate, thereby spurring the need for many of the gas processing plants listed in Figure 2.

That view is bolstered not only by the fact that initial production (IP) rates for crude oil in the Delaware are considerably higher than in the Midland, but also by the AI-based analysis of Novi Labs (RBN’s corporate parent), which has determined through its machine-learning approach that the Delaware has a far larger inventory of high-quality wells — 5.5 years of Tier 1 sites at current drilling rates and 7.3 years of Tier 2 sites — than the Midland (with 3.6 years of Tier 1 and 3.8 years of Tier 2 inventory). Better yet, at a flat $70/bbl price for WTI, Novi Labs found that the Delaware has more than 70,000 drilling locations — more than 25 years of inventory at current drilling rates — that would earn at least a 25% rate of return on investment. (The estimates above are from Q3 2025. Novi Labs will be publishing updated estimates for the Midland and Delaware in the coming weeks.)

We think that all this portends continued growth in both the gassier and less-gassy parts of the Delaware, assuming, of course, that the infrastructure required to facilitate increased gas production is in place. The gas processing projects now in the works would appear to support at least another 6 Bcf/d of dry-gas production in the Permian, and we expect that at least a couple more gas processing plants will be announced before the end of this year.