Verde Clean Fuels said it has suspended development of its gas-to-liquids project with independent shale producer Diamondback Energy in the Permian Basin. The proposed project was to be Verde’s first commercial plant, designed to process 34 MMcf/D of associated natural gas into about 3,000 B/D of gasoline.
Houston-based Verde said in a statement on 6 February that the primary reason for suspending the project was rising demand for natural gas within the Permian region.
The company entered into a joint development agreement 2 years ago with Cottonmouth Ventures, a wholly owned subsidiary of Diamondback, to build the plant using Verde’s proprietary technology. Verde also said it completed the front-end engineering and design (FEED) study for the project in December.
“We are thankful to Diamondback for their support of the Permian Basin project. The learnings from the work that was completed, in particular from the FEED study, will continue to be useful as we explore other opportunities to deploy our technology,” Ernest Miller, CEO of Verde, said in a statement.
Miller added that Verde will pursue other opportunities in regions where natural gas is stranded or flared because of limited market access. The company says its fully refined gasoline product is 30% less carbon-intensive than conventional gasoline.
In January, Verde closed a $50-million equity investment round with Cottonmouth, bringing Cottonmouth’s total investment in the company to $70 million. Cottonmouth remains the second-largest shareholder in Verde.
The now-suspended plant was to be built in Midland County, Texas, on an existing Diamondback location, according to company presentations published on Verde’s website in May 2025. At the time, Verde noted that limited pipeline infrastructure in the Permian region had led to gas-pipeline bottlenecks and elevated flaring.
Under the agreement, Verde was to collect a fee for converting natural gas into gasoline, which would have been owned and marketed by Diamondback at a premium to regional natural gas prices.
Verde owns a demonstration plant in New Jersey that has been in operation since 2015.