San Mateo Expands Marlan Gas Processing Complex
The Eddy County expansion follows new and extended long-term gas gathering and processing contracts tied to Matador's production.
Updated on Nov. 2, 2026 in Oil and Gas
San Mateo Midstream, a joint venture of Matador Resources Co. and Five Point Infrastructure LLC, agreed to expand its Marlan natural gas processing complex in Eddy County. The company also signed a new long-term fixed-fee gas gathering and processing contract and extended an existing agreement.
Why it matters
The agreements are expected to add long-term volumes across San Mateo's gathering and processing system. The expansion is planned alongside anticipated production growth from Matador in the region.
The Marlan expansion adds a 300-MMcfd processing train and about 20 miles of new pipeline, lifting capacity from 460 MMcfd to over 1.3 bcfd. The 2026 midstream capital budget is estimated at $170-190 million, including about $25 million added for the project, and completion is still subject to permitting and construction.
The players
Matador Resources Co.
Matador Resources Co. is an independent oil and gas company operating in the Delaware Basin, and it holds a 51% stake in San Mateo Midstream.
Five Point Infrastructure LLC
Five Point Infrastructure LLC is an infrastructure investment firm that holds a 49% stake in San Mateo Midstream.
The details
The expansion includes a new 300-MMcfd processing train and a nitrogen rejection unit at the Marlan complex. San Mateo will also build about 20 miles of natural gas pipeline to connect newly dedicated acreage in the northern Delaware basin and a field treating facility for CO2 removal.
Timeline
December 2024: Matador contributed Pronto Midstream LLC to San Mateo.
October 2018: The original gas gathering and processing agreement was announced.
2026: Midstream capital expenditures rise by about $25 million for the year.
Yearend 2028: The Marlan expansion is targeted for completion.
Market Landscape
The Marlan expansion extends the Delaware Basin midstream buildout that has followed rising associated gas output from oil wells in southeastern New Mexico. The new processing capacity positions San Mateo to handle that gas volume as Matador's production grows in Eddy and Lea counties.
For New Mexico residents and energy workers, the expansion signals continued midstream investment and job activity in Eddy and Lea counties through 2028. Gas processing capacity affects how quickly producers can bring associated gas to market, which can influence regional drilling and royalty flows.
The takeaway
Expanded midstream capacity is a key constraint on how fast Permian-area gas production can reach market. Watch the 2028 completion timeline and any permitting updates for the Marlan project.
Further reading
Explore more New Mexico Oil and Gas coverage for context on the state's midstream buildout.
