Kinetik Expands Kings Landing II Project to 300 MMcf/d Amid Rising Delaware Basin Activity
Kinetik Holdings Inc. has announced a final investment decision (FID) for the development of Kings Landing II (KLII), a major natural gas processing expansion project located at the company’s existing Kings Landing complex in New Mexico. The new facility will add 300 million cubic feet per day (MMcf/d) of natural gas processing capacity, significantly strengthening Kinetik’s position in the rapidly growing Northern Delaware Basin.
The decision marks a substantial increase from the project’s originally planned 200 MMcf/d expansion, underscoring the accelerating pace of upstream development and customer demand across the region. By increasing the scale of KLII by 50%, Kinetik is positioning itself to meet rising production volumes while also enhancing long-term infrastructure flexibility in one of the most active hydrocarbon basins in North America.
The Kings Landing complex is strategically located in southeastern New Mexico, an area that has experienced sustained drilling and completion activity due to strong economics and abundant resource potential. Producers operating in northern Eddy and Lea Counties continue to increase development programs, driving the need for additional midstream infrastructure capable of processing larger volumes of natural gas, including sour gas streams.
Jamie Welch, President and Chief Executive Officer of Kinetik, said the company’s decision reflects both the strength of its commercial relationships and confidence in future basin growth.
According to Welch, customer development activity in the Northern Delaware Basin continues to exceed expectations, prompting the company to expand the scale of the project beyond its original design. He noted that Kinetik’s extensive acreage footprint and long-term commercial agreements have provided the visibility needed to move forward with a larger processing plant.
Welch also emphasized that the KLII project has been designed with future scalability in mind. While the immediate focus is on the construction of the 300 MMcf/d plant, the infrastructure layout and engineering plans preserve the option for a third 200 MMcf/d processing facility at the Kings Landing site in the future. This modular approach gives Kinetik the flexibility to respond to continued production growth and changing market conditions over the coming years.
The KLII expansion represents another major step in Kinetik’s broader strategy to strengthen its integrated midstream network throughout the Permian Basin. The company operates an extensive system of natural gas gathering, processing, transportation, and water handling assets serving producers across Texas and New Mexico.
Upon completion of Kings Landing II in the second half of 2028, Kinetik’s total system-wide natural gas processing capacity is expected to exceed 2.7 billion cubic feet per day (Bcf/d). This includes more than 700 MMcf/d of sour gas processing capacity concentrated in northern Eddy and Lea Counties, positioning the company among the leading midstream operators in the region.
Sour gas processing capability has become increasingly important in the Delaware Basin as producers continue to target reservoirs with higher hydrogen sulfide and carbon dioxide content. Midstream companies capable of handling sour gas streams are gaining strategic advantages because such infrastructure requires specialized engineering, environmental controls, and operational expertise.
The expansion at Kings Landing is expected to improve operational efficiency while enhancing reliability for producers seeking long-term takeaway and processing solutions. The additional capacity will help reduce bottlenecks in the basin and support growing natural gas production associated with crude oil drilling activity.
Kinetik estimates the total cost of the KLII project at approximately $260 million. The investment forms part of the company’s broader capital allocation strategy focused on infrastructure expansion, customer connectivity, and long-term cash flow growth.
As a result of the increased project scope, Kinetik now expects its 2026 capital expenditures to reach the upper end of its previously announced guidance range of $450 million to $510 million. The revised outlook reflects the company’s willingness to accelerate investment in response to favorable market conditions and increasing customer demand.
Industry analysts have noted that infrastructure expansion in the Delaware Basin remains critical as natural gas production continues to rise alongside oil output. Although crude oil remains the primary economic driver for many producers, associated natural gas volumes have increased significantly, creating a growing need for gathering systems, processing plants, pipelines, and compression facilities.
The Permian Basin, particularly the Delaware sub-basin, has become one of the most prolific energy-producing regions globally. Strong drilling economics, technological improvements, and sustained operator investment have contributed to rising hydrocarbon production over the past decade. Midstream companies like Kinetik play a central role in supporting this growth by ensuring that natural gas and related products can be efficiently gathered, processed, and transported to downstream markets.
Kinetik’s expansion plans also align with broader industry trends favoring larger-scale and more integrated infrastructure systems. Companies are increasingly prioritizing operational flexibility, scalability, and long-term commercial arrangements to manage evolving production patterns and market volatility.
The Kings Landing complex has already established itself as a critical processing hub within Kinetik’s network. By expanding the facility’s capacity, the company aims to reinforce its competitive position while providing customers with reliable infrastructure solutions capable of supporting future production increases.
In addition to processing natural gas, facilities like Kings Landing also play an essential role in extracting natural gas liquids (NGLs), which are valuable feedstocks used in petrochemical manufacturing, heating, transportation fuels, and industrial applications. Rising NGL demand in domestic and export markets continues to support investment across the midstream sector.
The KLII project announcement comes amid continued consolidation and infrastructure investment across the Permian Basin midstream industry. Companies are competing to secure long-term customer contracts and expand capacity ahead of anticipated production growth later this decade.
Construction of Kings Landing II is expected to begin following detailed engineering and permitting activities. Once operational, the facility will contribute significantly to regional gas processing capacity while enhancing Kinetik’s ability to serve producers operating in one of the fastest-growing areas of the U.S. energy sector.
By approving the expanded 300 MMcf/d project, Kinetik is signaling strong confidence in the long-term outlook for the Northern Delaware Basin and reaffirming its commitment to supporting customer growth through strategic infrastructure investment.
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