NGL Energy Partners LP NGL is making progress toward expanding its produced water treatment capabilities in West Texas. The partnership’s subsidiary, NGL Water Solutions Permian, LLC, has accepted the terms of a draft permit issued by the Texas Commission on Environmental Quality (TCEQ) for a proposed treatment facility in Reeves County. The development marks an important regulatory step toward converting produced water from oil and gas operations into a usable resource for industrial and agricultural applications.
The project will now enter the public notice and comment process. Once the necessary regulatory requirements are satisfied, the initiative is expected to support the development of an alternative water supply for the Pecos River Basin and surrounding industrial customers.
Phased Expansion to Support Growing Water Demand
The proposed facility is designed to increase treated-water discharge capacity gradually, allowing NGL to align infrastructure investments with market demand. Under draft Texas Pollutant Discharge Elimination System Permit No. WQ0005445000, the project will initially accommodate an average discharge of 650,000 gallons per day.
Subsequent development phases will raise daily discharge capacity to 2 million gallons, followed by 10 million gallons, before reaching 16.9 million gallons in the final stage. The ultimate capacity represents approximately 400,000 barrels of treated water per day.
The treated water is designated for discharge into Salt Creek and the Upper Pecos River downstream of Red Bluff Reservoir. By implementing the project in stages, NGL intends to manage capital requirements while expanding treatment operations in response to commercial opportunities.
Industrial Applications Offer New Opportunities
NGL plans to leverage its existing produced water collection and handling network to establish an additional water source for Texas. The treated water is intended for various applications, including agricultural irrigation, farming operations and cooling systems used by data centers, power generation facilities and other industrial businesses.
These potential uses highlight the project’s role in addressing water requirements beyond traditional oilfield operations. Replacing conventional freshwater with appropriately treated produced water may also reduce pressure on municipal water systems and help conserve groundwater and surface-water resources.
Advanced Treatment Technology Underpins the Project
The development incorporates advanced desalination and purification processes designed to remove dissolved salts and other unwanted substances from produced water. The objective is to achieve water quality that satisfies TCEQ’s discharge standards while supporting commercial-scale treatment operations.
NGL will need to demonstrate treatment effectiveness, validate the quality of processed water and comply with applicable environmental requirements. These measures will be central to ensuring that the proposed operations meet regulatory expectations for environmental protection and public health.
Overall, the initiative represents an opportunity for NGL to extend the commercial value of its existing water infrastructure. Successful regulatory advancement and phased development would position the partnership to serve additional water markets while supporting freshwater conservation efforts in Texas.
NGL’s Zacks Rank & Key Picks
Tulsa, OK-based NGL Energy is a publicly traded partnership that provides water management and energy transportation services to oil and gas producers. Currently, NGL has a Zacks Rank #3 (Hold).
Investors interested in the energy sector may consider some top-ranked stocks like Canadian Natural Resources Limited CNQ, Cheniere Energy, Inc. LNG and CVR Energy, Inc. CVI, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Calgary-based Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The Zacks Consensus Estimate for CNQ’s 2026 earnings indicates 61.4% year-over-year growth.
Houston, TX-based Cheniere Energy is primarily engaged in the business of liquefied natural gas. It constructs and operates LNG terminal and is also involved in LNG and natural gas marketing. The Zacks Consensus Estimate for LNG’s 2026 earnings indicates 34.4% year-over-year growth.
CVR Energy is an independent refiner and marketer of high-value transportation fuels and a producer of ammonia and urea ammonia nitrate fertilizers. The Zacks Consensus Estimate for CVI’s 2026 earnings indicates 493.4% year-over-year growth.
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This article originally published on Zacks Investment Research (zacks.com).
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
