NGL Energy Partners LP is on the path to becoming the largest water transportation and disposal company in the Delaware Basin where operators are currently facing a flood of produced water volumes.

The Tulsa, Okla.-based midstream operator agreed May 14 to combine all of the assets of Mesquite Disposals Unlimited LLC with NGL’s water solutions business. NGL plans to fund the $890 million acquisition with a mix of perpetual preferred units and warrants.

Mesquite is a privately held operator focused on produced water disposal in the Northern Delaware Basin with 35 saltwater disposal wells across New Mexico’s Eddy and Lea counties and Loving County, Texas. The company has roughly 1 million barrels per day (bbl/d) of disposal capacity under long-term acreage dedications and minimum volume commitments.

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