Select Water Solutions, Inc. (NYSE: WTTR) and ISE Chemicals Corporation (TSE: 4107) have signed a definitive agreement to develop commercial-scale iodine extraction and refining facilities using produced water from Select's existing water infrastructure network across Texas, New Mexico, and Oklahoma.

Under the terms of the agreement, ISE Chemicals will fund, design, construct, own, and operate the iodine extraction and refining facilities. Select will provide produced water sourcing, transportation, storage, pretreatment, recycling, and infrastructure support, in exchange for a royalty payment.

The first facility, to be located in Select's Permian Basin footprint, is targeted for commissioning in 2027. The companies have set a target of approximately 3,000 tonnes per year of iodine production by the end of 2030.

ISE Chemicals will conduct operations through its existing U.S. subsidiary, Woodward Iodine Corporation. The companies described the collaboration as one of the first large-scale efforts to commercialize iodine recovery from produced water using existing oilfield water infrastructure in the United States.

"By combining Select's infrastructure network, water treatment capabilities, and produced water expertise with ISE Chemicals' nearly century-long leadership in iodine production, we believe we can unlock a new resource recovery opportunity from produced water," said John Schmitz, Chairman, President and Chief Executive Officer of Select Water Solutions.

Toshiro Kasuya, President and Chief Executive Officer of ISE Chemicals Corporation, said the collaboration provides "a compelling opportunity to expand domestic production capacity" while applying the company's extraction and processing expertise to a new resource base.

Additional details on facility capacity, development timelines, and expansion phases will be announced as engineering studies and development planning progress, according to the companies.