Vaquero Midstream Announces Major Expansion with 70-Mile Pipeline and Cryogenic Processing Plant in the Delaware Basin
Vaquero Midstream, a leading natural gas gathering and processing company in the Delaware Basin, has unveiled plans to enhance its infrastructure with two significant projects: the construction of a 70-mile, 24-inch high-pressure pipeline loop and the development of a new 200 million cubic feet per day (MMcf/d) cryogenic processing plant. These initiatives are designed to strengthen Vaquero’s gathering and processing capabilities, providing greater capacity for natural gas transportation and processing in the rapidly growing Delaware Basin, particularly from the state line area to the Waha Hub in Texas.
A Bold Step in System Expansion
Vaquero Midstream is committed to maintaining its position as one of the most reliable midstream operators in the Delaware Basin, and these new expansions are a testament to that commitment. According to Harrison Holmes, CEO of Vaquero Midstream, the company’s expansion plans are crucial for ensuring the continued growth and efficiency of its gathering system. Holmes emphasized, “This expansion of our gathering system will be key in providing direct access on Vaquero’s system from northern Reeves and Loving Counties, Texas, to our processing complex near Waha. Our continued goal is to offer producers a unified gathering platform, supported by downstream market connectivity and reliable power infrastructure.”
The new infrastructure projects will directly benefit the company’s operations in an area that has seen significant growth in natural gas production. Vaquero Midstream’s expanded capabilities are expected to enhance its ability to serve producers in northern Reeves and Loving Counties while boosting access to downstream markets. These improvements come as part of the company’s ongoing efforts to support the energy needs of producers in the region and to meet the growing demand for natural gas processing and transportation.
Key Project Details
Gathering System Expansion
One of the most significant elements of this expansion is the 70-mile, 24-inch high-pressure pipeline loop that will connect various parts of Vaquero’s existing gathering system. This new pipeline will originate at Vaquero’s processing complex located near the Waha Hub in Pecos County, Texas, and will extend into Vaquero’s existing high-pressure pipeline system in Loving County, Texas. The pipeline will serve as a critical link in Vaquero’s natural gas gathering network, which spans parts of Ward, Winkler, and Loving Counties, Texas.
This expansion will provide a substantial increase in gathering capacity for Vaquero. The company’s legacy system, which currently handles approximately 400 million cubic feet per day (MMcf/d) of natural gas, will be able to accommodate up to 800 MMcf/d following the completion of the pipeline extension. This increased capacity is essential as production in the northern end of Vaquero’s system continues to grow, particularly in the coming years.
Furthermore, the new pipeline will provide a significant hydraulic benefit by improving the ability to gather gas from the northern parts of Vaquero’s system. As gas production ramps up in this area, the pipeline will ensure that there is sufficient infrastructure to handle the increased volume, ensuring reliability and efficiency for producers in the region.
Vaquero expects this critical expansion to be completed and placed into service by the end of 2025, marking a key milestone in the company’s strategic growth in the Delaware Basin.
Cryogenic Processing Plant
The second major component of the expansion is the development of a 200 MMcf/d cryogenic processing plant, which will significantly bolster Vaquero’s processing capacity in the Delaware Basin. With the addition of this new processing facility, Vaquero’s total processing capacity in the basin will increase to 600 MMcf/d, reinforcing the company’s ability to meet the growing demand for natural gas processing services.
Cryogenic processing is an essential component of natural gas operations, as it allows companies to separate valuable natural gas liquids (NGLs) and other components from the methane. By expanding its processing capabilities, Vaquero will not only increase its ability to process natural gas but also enhance its capacity to extract and deliver valuable byproducts such as NGLs. This increase in processing capacity will be supported by the existing infrastructure for both residue gas and NGLs, ensuring that the new plant can be operational with maximum efficiency.
The processing plant is expected to be fully operational by March 2026, just a few months after the gathering system expansion is completed. This phased approach to the expansion projects will allow Vaquero to ramp up its capabilities incrementally, ensuring that producers in the Delaware Basin can rely on the company for the services they need to maximize production and profitability.
Strategic Financing and Support
To fund these major infrastructure projects, Vaquero Midstream has secured a portion of its recently announced $400 million credit facility, which is led by BOK Financial. The financing will provide the necessary capital to support the expansion efforts and ensure that the company can deliver on its ambitious growth plans.
This credit facility is an essential component of Vaquero’s strategy to expand its operations in the Delaware Basin. With the support of this financing, Vaquero will be able to accelerate its growth trajectory and enhance its service offerings to producers in the region. The company’s ability to secure such a significant credit facility underscores the strength of its operations and its position as a trusted midstream partner in the Delaware Basin.
A Bright Future for Vaquero Midstream
Vaquero Midstream’s planned system expansion marks a key milestone in the company’s long-term strategy to become the leading natural gas gathering and processing operator in the Delaware Basin. With a focus on providing reliable, efficient, and scalable services to its customers, Vaquero is positioning itself for continued growth in one of the most productive and rapidly evolving natural gas regions in the United States.
The company’s expansion plans are aligned with the broader trends in the natural gas industry, as increased production in the Permian Basin and surrounding areas continues to drive demand for midstream infrastructure. By investing in key infrastructure projects such as the 70-mile pipeline loop and the cryogenic processing plant, Vaquero is positioning itself to meet this growing demand while continuing to deliver top-tier service to its customers.
Vaquero Midstream’s expansion of its gathering system and processing capabilities is a significant step forward in its mission to support natural gas producers in the Delaware Basin. These projects will not only increase the company’s operational capacity but also enhance its ability to provide reliable service, ensuring that it remains a key player in the region’s energy landscape for years to come. As production in the Delaware Basin continues to grow, Vaquero’s infrastructure investments will play a critical role in supporting that growth and ensuring that natural gas flows smoothly from the wellhead to the marketplace.
