Lucid Energy Group Tuesday announced the company has executed a new, long-term natural gas gathering and processing agreement with ExxonMobil unit XTO Energy, Kallanish Energy reports.
Under the new agreement, 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 deal 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 U.S. Gulf Coast.
Lucid’s system in the northern Delaware Basin currently consists of more than 2,000 miles of pipeline spanning five counties in New Mexico and Texas.
Lucid also announced it’s developing its next cryogenic processing plant, at its flagship Red Hills Natural Gas Processing Complex in Lea County, New Mexico. The Red Hills V plant’s capacity will total 230 million cubic feet of natural gas per day (Mmcf/d) and will bring
the total processing capacity of Lucid’s natural gas processing franchise in the northern Delaware Basin to 1.2 billion cubic feet per day (Bcf/d).
Lucid expects to commission Red Hills V in the second quarter of 2020. The expansion will follow the anticipated commissioning of the 230 Mmcf/d Red Hills IV plant in October.
“We have continued to grow our relationship with XTO in the northern Delaware Basin since its entry into New Mexico,” said Lucid CEO Mike Latchem. “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.”
Dallas-based Lucid bills itself as the largest privately-held natural gas processor in the Delaware Basin. The company’s financial backing comes from a joint venture formed by Riverstone Global Energy and Power Fund VI, an investment fund managed by Riverstone Holdings LLC, and investment funds managed by the The Goldman Sachs Group’s Merchant Banking Division.
This post appeared first on Kallanish Energy News.