NGL is turning produced-water disposal into a “Delaware Basin water utility”—and de-leveraging could unlock major multiple expansion.
Overview
NGL Energy Partners LP is a midstream MLP that has materially transformed from a collection of commodity-oriented businesses into a more focused infrastructure company dominated by Water Solutions in the Permian’s Delaware Basin. The pivot was accelerated by the April 2025 divestiture of the wholesale propane business and 17 related NGL terminals, simplifying the story and concentrating capital on higher-margin, fee-based produced-water gathering, transport, disposal, and recycling. Water Solutions generated ~84% of total segment Adjusted EBITDA in Q3 FY2026 and benefits from a utility-like model: ~90% of volumes are secured by long-term dedications/MVCs, and ~80% of disposal volumes come from investment-grade E&Ps (FY2025). NGL’s scale—an integrated large-diameter pipeline and disposal network—reduces customer trucking costs and embeds the partnership as essential operating infrastructure. The remaining segments include Crude Oil Logistics (Grand Mesa pipeline and related services) and Liquids Logistics (butane blending and terminals), but the investment narrative is increasingly centered on water infrastructure, de-leveraging, and potential long-term technology upside (desalination/mineral recovery).