DALLAS — Lucid Energy Group has announced it is underway with the development of its next large cryogenic processing plant at its flagship Red Hills Natural Gas Processing Complex in southwestern Lea County.
The Red Hills V plant, located about 20 miles west of Jal on N.M Hwy 128, will have the capacity to process 230 million cubic feet of natural gas per day (MMcf/d). The company said the large cryogenic processing plant 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.
Lucid said in a news release it 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 2019.
Lucid also announced the company has executed a new long-term natural gas gathering and processing agreement with XTO Energy Inc., a subsidiary of ExxonMobil.
Under the new agreement announced Tuesday, 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.
“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.”
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 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 Energy Group is the largest privately held natural gas processor in the Delaware Basin, providing a full range of gas midstream services to more than 50 customers in New Mexico and West Texas.