Trace Midstream Partners II, LLC announced that it will construct the Apollo Gas Plant, a new natural‑gas processing facility capable of handling 250 million cubic feet per day (MMcf/d). Located in Eddy County, the plant will sit at the heart of the Northern Delaware Basin—a region that has seen a rapid surge in production activity over the past few years. By adding cryogenic processing capacity to its existing gathering, compression, and transportation network, Trace aims to give producers a truly “wellhead‑to‑market” solution that reduces the number of third‑party hand‑offs and streamlines logistics. The company expects the plant, together with its supporting pipelines and compressor stations, to enter service in the fourth quarter of 2027, positioning Trace to capture a larger share of the basin’s growing gas output.
Trace Midstream Announces Apollo Gas Plant
The announcement details a comprehensive build‑out that includes the Apollo Gas Plant itself, 36 miles of new low‑pressure gathering pipelines, and two new compressor stations. These new assets will be tied directly into Trace’s existing system, which already spans more than 200 miles of pipelines and 14 compressor stations. The plant will be supported by multiple long‑term contracts from both new and existing customers, although the specific volumes and pricing terms were not disclosed. CEO Josh Weber emphasized that the project “expands our services across the natural gas value chain” and will provide a single, reliable outlet for producers as activity continues to surge in the Northern Delaware Basin. The integration of processing capability is described by Trace as a “transformational addition” that moves the company beyond pure gathering and compression into full‑scale midstream operations.
Infrastructure Expansion in the Northern Delaware Basin
When the Apollo facility is completed, it will join Trace’s current infrastructure, which already includes more than 200 miles of pipelines, 14 compressor stations, and over 125,000 horsepower of compression capacity. The new 36‑mile gathering line will collect raw gas from wells across Eddy and neighboring Lea counties, feeding it to the two compressor stations that boost pressure for efficient transport. From there, the gas will flow into the Apollo processing train, where cryogenic technology will separate natural gas liquids and remove contaminants, delivering pipeline‑ready dry gas. This expanded footprint will enable the Trace System to gather and transport more than 800 MMcf/d, effectively creating a fully integrated outlet that spans low‑pressure gathering, compression, transportation, and processing. By consolidating these functions under one corporate umbrella, Trace reduces the need for producers to contract multiple midstream providers, potentially lowering overall transaction costs and simplifying operational planning.
Long‑Term Contract Backing
The plant’s commercial foundation rests on several long‑term agreements with both new entrants and established customers in the basin. While the press release does not reveal the exact contract sizes, the language underscores that these agreements are intended to secure a steady feedstock supply for the Apollo Plant and to underpin the projected Q4 2027 start‑up. Such contracts are typical in midstream projects, providing the developer with revenue certainty that can be used to finance construction and mitigate market risk. Trace’s ability to lock in these contracts before the plant is built signals confidence from customers in the company’s operational expertise and the strategic value of an integrated, end‑to‑end solution.
Key Takeaways
- Trace Midstream will construct the Apollo Gas Plant, a 250 MMcf/d natural‑gas processing facility in Eddy County, New Mexico.
- The project includes 36 miles of gathering pipelines, two compressor stations, and is expected to be in service in the fourth quarter of 2027.
- Multiple long‑term contracts with new and existing customers will back the plant’s operations.
EnergyInsyte's Take
The Apollo Plant gives Trace a rare end‑to‑end midstream solution in a rapidly producing basin, potentially simplifying logistics for local producers. Execution risk remains tied to the timely delivery of pipelines, compressor stations, and the securing of feedstock under the disclosed contracts. Executives should monitor construction milestones and any updates on contract terms as the 2027 service date approaches.
Source: Businesswire
