Industry consolidation has winnowed down the number of independently owned assets in the Permian Basin. One we’re monitoring is Brazos Midstream’s Midland G&P system, which is likely to attract interest following a strong performance from a recent expansion.
Brazos’ 200 MMcf/d Sundance plant entered service in October 2024 and quickly ramped up activity. The cryogenic facility in Martin County, TX was initially supplied gas from the Brazos system previously processed by third parties, aiding the fast ramp. Sundance inlets averaged 178 MMcf/d in March 2025, or 89% utilization, according to asset data in East Daley Analytics’ Energy Data Studio (see figure).
We believe Diamondback Energy (FANG) is supplying the most volumes to the Sundance plant. FANG in April 2025 acquired Double Eagle IV, the anchor producer on the G&P system, likely underpinning the surge in throughput. Brazos plans to add a second 300 MMcf/d plant later in 2025, though the exact timing is unclear.
Brazos receives $0.20/Mcf for gathering services on the Midland system, according to the tariff filed with state regulators. Data in Energy Data Studio shows a Permian-wide gross margin of $0.99/Mcf for gathering and processing services. Based on the recent throughput, we estimate the Midland system including Sundance generates ~$49.8MM of EBITDA for Brazos.
East Daley anticipates elevated interest in this emerging G&P asset, particularly from large integrated public companies that already account for ~75% of rich gas processing in the region (see figure). Nearly all these companies (except MPLX, which operates exclusively in the Delaware) have overlapping infrastructure with the Brazos system (see Energy Data Studio for an asset map). Investor interest likely centers not only on G&P capabilities but also the NGL stream, which supports downstream revenue from NGL takeaway, storage, fractionation and exports — assets typically tied to fee-based cash flows. – Robert Wilson, CFA Tickers: EPD, ET, FANG, MPLX, OKE, PSX, TRGP.
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