Lower 48 produced water specialist Goodnight Midstream has completed a private equity (PE) commitment from energy-focused Tailwater Capital LLC, which has been an investor in the company since 2016.

As part of the transaction, Tailwater committed more than $500 million to allow Goodnight to continue to expand its services. Goodnight, majority owned by PE firm TPG Capital, provides midstream water services to operators in the Permian Basin, as well as the Eagle Ford and Bakken shales.

Goodnight's platform now consists of 500 miles of produced water pipelines with 1.6 million barrels/day of throughput capacity. Most of the facilities and trans-basin pipeline systems are in the Permian Delaware, where it has more than 700,000 barrels/day of throughput capacity.

“This investment will provide a significant amount of equity growth capital from a trusted partner who understands that long-term growth in this sector requires a strong balance sheet,” Goodnight CEO Patrick Walker said.

Added Tailwater managing partner Edward Herring, “With favorable market dynamics driving further investment in the produced water midstream sector, and the company's numerous customer contract wins, our team at Tailwater has strong conviction in Goodnight's industry leadership and continued success."

The U.S. produced water market could reach 4 million barrels/day by 2025, according to a report in July by Raymond James & Associates Inc.

Wheeling and dealing in the Lower 48 produced water market has expanded as unconventional production requires water for fracturing operations. Last month, NGL Energy Partners LP launched plans to build water pipeline and disposal infrastructure in the Permian Basin with a $600 million deal to acquire Hillstone Environmental Partners LLC. The system would be integrated into an existing Permian Delaware produced water platform, which includes NGL’s recent purchase of Mesquite Disposals Unlimited LLC.

Earlier this month, Bison Oilfield Services LLC agreed to buy Tapstone Energy LLC's produced water infrastructure in the Anadarko Basin. And in August, Lagoon Water Solutions paid $85 million for part of Continental Resources Inc.'s Oklahoma oilfield water system.