Dallas-based Lucid Energy Group has secured a long-term natural gas gathering and processing agreement in New Mexico’s Permian Basin with ExxonMobil subsidiary XTO Energy Inc.

Under the new agreement, XTO would deliver gas production from a portion of the ExxonMobil leasehold in the Permian Delaware sub-basin to Lucid’s South Carlsbad gas gathering and processing system. The deal would provide firm processing capacity and enable gas and liquids to be delivered to ExxonMobil’s downstream and chemical manufacturing sites on the Gulf Coast.

“We have continued to grow our relationship with XTO in the northern Delaware Basin since its entry into New Mexico,” said 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 supermajor in 2017 struck a deal to more than double its Permian resources, adding about 275,000 acres, mostly in New Mexico. ExxonMobil expects to produce more than 1 million boe/d from West Texas and New Mexico by as early as 2024. The size of its resource base overall in the Permian is estimated at about 10 billion boe, “and is likely to grow further” as development continues.

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

Lucid also has begun developing its next large cryogenic processing plant at the flagship Red Hills Natural Gas Processing Complex in Lea County, NM. The Red Hills V plant, now set for commissioning by mid-2020, is to have the capacity to process 230 MMcf/d and bring the total processing capacity in the northern Delaware to 1.2 Bcf/d. The expansion would follow the anticipated commissioning this October of the 230 MMcf/d Red Hills IV plant.

A study issued in May that was prepared for ExxonMobil estimated the producer’s Permian resources in New Mexico alone could generate $64 billion in net economic benefits for the state and local communities over the next four decades.

ExxonMobil also has been bearing down to expand its Gulf Coast presence under a $20 billion Growing the Gulf initiative. Projects in the works include a state-of-the-art aviation lubricants blending, packaging and distribution facility in the Baton Rouge, LA, area, as well as refining and chemical expansions at the Beaumont and Baytown facilities east of Houston.

In addition, ExxonMobil and Qatar Petroleum in early February sanctioned the Golden Pass liquefied natural gas export project in Sabine Pass, TX, which is expected to cost around $10 billion.