Delaware Basin gains another gas processing facility

By Luke Geiver | May 23, 2017

Delaware Basin oil and gas producers now have another option for processing their gas following the startup of a cryogenic natural gas processing plant in Lea County, New Mexcio. Lucid Energy Group, a Dallas-based midstream provider, has opened its Red Hills II facility, bringing Lucid’s total processing capacity in the South Carlsbad area in Lea and Eddy counties to 345 MMcf/d. The plant was brought online ahead of schedule.

Jay Langham, vice president of Lucid, said his team will not shift focus to building another facility in Eddy County. In August last year, Lucid acquired Agave Energy Co. with the intent to build-out more infrastructure in Eddy County. The Roadrunner I cryogenic processing plant will process 200 MMcf/d.

Cryogenic natural gas processing plants cool the gas stem to sub-zero temperatures. The freezing actions help to remove natural gas liquids leaving a methane stream for shipmen and sale via pipeline. Producers in the Delaware Basin create a high-gas cut from many wells in the Basin.

Lucid’s natural gas gathering and processing facilities now include more than 1,300 miles of pipeline and multiple gas processing facilities.

Mexico is a major market for natural gas produced from New Mexico and Texas. A recently released report from the Federal Reserve Bank of Dallas shows that U.S. liquefied natural gas exports have picked up and are much higher than last year. “Natural gas exports to Mexico continue to show strength,” the report said.