Kinetik Holdings has taken a final investment decision (FID) on the Kings Landing II (KLII) project, an expansion of its natural gas processing facilities in New Mexico, US.

To be built with an investment of around $260m, the new plant will have the capacity to process 300 million cubic feet per day (mcf/d) of gas. This marks a 50% increase from the initially planned 200mcf/d.

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Upon completion, which is expected in the latter half of 2028, Kinetik’s overall processing ability will surpass 2.7 billion cubic feet per day (bcf/d). This capacity includes more than 700mcf/d dedicated to sour gas processing in Eddy and Lea Counties.

With the expanded capabilities of KLII, Kinetik anticipates reaching the higher end of its 2026 Capital Expenditures Guidance of between $450m and $510m.

Kinetik president and CEO Jamie Welch said: “We remain excited by the continued growth and robust development activity in the Northern Delaware Basin. Our decision to proceed with KLII at this expanded scale is a direct response to this activity.

“Today’s announcement reflects the strength of our existing acreage footprint, the accelerated pace of customer development plans and sustained commercial momentum. Importantly, the construction and design of KLII preserves the ability to add a third 200mcf/d processing plant at the Kings Landing complex.”

Kinetik operates as a fully integrated midstream C-corporation, focusing on the Permian-to-Gulf Coast sector within the Delaware Basin.

With headquarters in Houston and Midland, Texas, the company offers a range of services. These include gathering, transportation, compression, processing and treating for companies involved in the production of natural gas, natural gas liquids, crude oil and water.

In December 2024, Kinetik signed a definitive agreement to purchase Permian Resources’ natural gas and crude oil-gathering infrastructure, primarily located in Reeves County, Texas, for $180m in cash. The transaction closed in January 2025.

The acquisition expanded Kinetik’s capabilities across multiple midstream services including natural gas gathering, compression and processing, along with crude oil gathering.