Verde suspends gas-to-gasoline project in Permian Basin

Verde Clean Fuels said last week that it was suspending development of a natural gas-to-gasoline plant in the Permian Basin. It attributed the suspension primarily to changing market conditions driven by increasing demand for gas in the basin.

The company had been developing the project together with Cottonmouth Ventures, a wholly owned subsidiary of Diamondback Energy, after the two entered into a joint development agreement in February 2024. The facility would have used Verde’s STG+ technology and associated natural gas output from Diamondback’s Permian oil wells. The STG+ process – synthesis gas (syngas)-to-gasoline plus – converts syngas that is derived from diverse feedstocks into fully finished liquid fuels that require no additional refining.

Early development work on the Permian project since Verde and Cottonmouth partnered on it included a front-end engineering and design (FEED) study that was completed in December 2025.

However, the changing demand picture, driven by data centres and LNG export terminals, has increasingly been affecting the economics of Permian gas. And while oil producers were previously seeking ways to dispose of their associated gas output, it now looks like a more attractive product. Meanwhile, a buildout of takeaway gas capacity in the basin also provides producers with more options for selling their gas. This makes Verde’s offering less competitive – at least in the Permian – as it touts the additional benefit of flare mitigation for those using its technology.

“We are thankful to Diamondback for their support of the Permian Basin project,” stated Verde’s CEO, Ernest Miller. “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. This allows us to devote our resources toward other opportunities we have been developing in regions where natural gas is stranded or flared without access to a higher value outlet to market. Cottonmouth remains our second largest shareholder and supportive of our continued efforts to deploy our technology.”