US- based diversified energy company Lucid Energy Group has executed a new long-term natural gas gathering and processing agreement with XTO Energy, a subsidiary of ExxonMobil, for a new cryogenic processing plant in Southeast New Mexico.
Under the agreement, XTO is expected to deliver natural gas production from a portion of its leasehold position in south-eastern New Mexico to Lucid’s South Carlsbad gas gathering and processing system.
Lucid said that the agreement is set to provide XTO with firm processing capacity and enable gas and natural gas liquids deliveries to ExxonMobil’s downstream and chemical manufacturing sites on the US Gulf Coast.
Lucid CEO Mike Latchem said: “We have continued to grow our relationship with XTO in the northern Delaware Basin since its entry into New Mexico. Lucid’s assets are strategically positioned for XTO’s development plans and complement what its affiliates are planning for midstream infrastructure within the basin and out of the basin to the downstream markets.”
Lucid currently holds more than 3,218km of pipeline system in the northern Delaware Basin, spanning five counties in New Mexico and Texas.
Lucid developing a new cryogenic processing plant in Southeast New Mexico
The company is also involved in developing its next large cryogenic processing plant at its flagship Red Hills natural gas processing complex in Lea County, New Mexico.
The Red Hills V plant is designed to have the capacity to process 230 million cubic feet of natural gas per day (MMcf/d) and is expected to bring the its total processing capacity of natural gas processing franchise in the northern Delaware Basin to 1.2 billion cubic feet per day.
The company is expected to commission Red Hills V in the second quarter of 2020, and the expansion of the project is expected to follow the anticipated commissioning of the 230 MMcf/d Red Hills IV plant in October 2019.
Lucid is a major privately held natural gas processor in the Delaware Basin, offering a range of gas midstream services to more than 50 customers in New Mexico and West Texas.
