(Oil & Gas 360) – Matador Resources Company announced November 2 that its San Mateo Midstream joint venture has secured two long-term natural gas agreements with a major Delaware Basin producer, supporting an expansion of processing and pipeline infrastructure in southeastern New Mexico.The agreements include a new fixed-fee contract covering natural gas gathering, treating, and processing from dedicated acreage in Lea and Eddy counties, along with an extension of an existing agreement at San Mateo’s Black River processing plant. Matador did not identify the producer or disclose the financial terms.San Mateo, owned 51% by Matador and 49% by Five Point Infrastructure, expects the contracts to increase third-party volumes and support long-term revenue growth.To accommodate the additional production, San Mateo plans to construct a 300 million cubic feet per day natural gas processing train at its Marlan complex in Eddy County.The project also includes a nitrogen rejection unit, approximately 20 miles of new natural gas pipeline, and a carbon dioxide treating facility.Completion is targeted for the end of 2028, subject to permitting, equipment procurement, and construction schedules.Once operational, San Mateo’s total natural gas processing capacity is expected to exceed 1.3 billion cubic feet per day, nearly three times its capacity before Matador contributed Pronto Midstream to the joint venture in December 2024.The company anticipates that the Marlan expansion could generate more than $100 million in additional annualized adjusted EBITDA by the end of 2029.The expansion will require additional investment. Matador increased its 2026 midstream capital expenditure guidance by approximately $25 million to a range of $170 million to $190 million.The agreements follow San Mateo’s $752 million acquisition of operating assets from Cardinal Midstream Partners earlier this year.San Mateo has completed a southern connection between the Cardinal and existing San Mateo systems and plans another pipeline connection in 2027 linking gathering infrastructure in Lea and Eddy counties.The additional connection is expected to provide greater flexibility in moving natural gas between the Marlan and Pecos River processing facilities.Matador expects increasing utilization of the acquired Cardinal infrastructure to contribute $100 million to $115 million in adjusted EBITDA by 2028.For energy investors, the agreements illustrate the value of securing long-term transportation and processing commitments before committing capital to additional infrastructure.Fixed-fee contracts can provide greater revenue visibility than direct commodity exposure, although earnings remain dependent on production volumes, contract performance, and operating costs.The expansion also reflects growing demand for natural gas infrastructure as Permian Basin oil production generates additional associated gas.Adequate processing and transportation capacity is essential for producers seeking to maintain output while managing regional gas pricing and operational constraints.San Mateo’s growing third-party customer base could provide Matador with a more diversified earnings stream alongside its upstream operations.Investors will be monitoring construction costs, customer volumes, capacity utilization, and the timing of expected cash flow contributions as the projects advance toward completion.Disclaimer This informational, opinion, and insights article is provided for informational purposes only and does not constitute investment, legal, or financial advice. The views expressed are based on publicly available information and market conditions at the time of publication and are subject to change without notice.