DALLAS—Lucid Energy Group on Sept. 5 announced the company has executed a new long-term natural gas gathering and processing agreement with Marathon Oil Permian LLC, a subsidiary of Marathon Oil Co. (NYSE: MRO). Under the new agreement, Lucid now provides midstream services to Marathon under a long-term acreage dedication for all of Marathon’s operated acreage in Lea County, N.M., and a portion of Marathon’s operated acreage in Eddy County, N.M. To serve Marathon’s growing production, Lucid will significantly expand its existing gathering and compression infrastructure network.

Lucid also announced it is preparing to commission a new cryogenic processing plant at its Red Hills Natural Gas Processing Complex in Lea County. Known as Red Hills III, the new plant has the capacity to process 200 million cubic feet per day (MMcf/d) and is expected to come into service in October 2018. Red Hills III will provide additional processing capacity in support of near-term production from new commercial agreements, including the Marathon agreement. The plant is Lucid’s fifth cryogenic plant in southeast New Mexico and will bring Lucid’s total processing capacity in the Delaware Basin to 750 MMcf/d.

“Marathon is a premier producer and a valued customer that we are fortunate to serve,” said Lucid CEO Michael J. Latchem. “We are excited to see results from the world-class Delaware Basin continue to improve because of talented operators like Marathon. We are highly focused on staying in front of our customers’ drilling programs with new infrastructure and facilities that preserve the high standard of service producers have come to expect from Lucid.”

Onshore