Lucid inks gas processing deal, plans capacity expansion

Lucid Energy has executed a long-term gas gathering and processing agreement with XTO Energy under which XTO will deliver production from a portion of its leasehold position in southeastern New Mexico to Lucid’s South Carlsbad system.

Jul 10th, 2019

Lucid Energy Group, Dallas, has executed a new long-term natural gas gathering and processing agreement with ExxonMobil Corp. subsidiary XTO Energy Inc. under which XTO will deliver natural gas production from a portion of its leasehold position in southeastern New Mexico to Lucid’s South Carlsbad gas gathering and processing system.

The agreement provides XTO with firm processing capacity and enables deliveries of gas and natural gas liquids to ExxonMobil’s downstream and chemical manufacturing sites on the US Gulf Coast, Lucid said.

“We have continued to grow our relationship with XTO in the northern Delaware basin since its entry into New Mexico,” said Mike Latchem, Lucid’s chief executive officer.

“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,” Latchem said.

Lucid’s system in the northern Delaware basin currently includes more than 2,000 miles of pipeline spanning five counties in New Mexico and Texas.

Alongside its announcement of the XTO agreement, Lucid also said development of its next large cryogenic processing plant at its flagship Red Hills natural gas processing complex in Lea County, NM, is now under way (OGJ Online, Sept. 6, 2018).

To be known as Red Hills V and scheduled for start-up in second-quarter 2020, the new plant will have the capacity to process 230 MMcfd and will bring the total processing capacity of Lucid’s natural gas processing franchise in the northern Delaware basin to 1.2 bcfd.

The proposed expansion will follow scheduled commissioning of Lucid’s 230-MMcfd Red Hills IV plant in October 2019, the company said.

Contact Robert Brelsford at rbrelsford@endeavorb2b.com.

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