American Oil and Gas Reporter - June 2014 - 130

SpecialReport: Hot Spots: Permian Basin

Lucid Energy's Silver complex
in Sterling County, Tx., shown
here, includes two cryogenic
gas processing plants with 80
million cubic feet a day in total
capacity. The company also has
a plant in Irion County, Tx., with
40 MMcf/d capacity, and expects
to complete a third facility early
next year in Reagan County, Tx.,
that will have 200 MMcf/d of gas
processing capacity.

well. The company has built more than 450
miles of high- and low-pressure pipeline
delivering liquids-rich natural gas to two
cryogenic processing complexes in Sterling and Irion counties. A third facility is
expected to come on line in the first quarter of 2015.
He says the first location-the Silver
complex in Sterling County-includes two
cryogenic processing plants with 80 million cubic feet a day in total capacity. The
company's second location, the Munson
plant east of Barnhart in Irion County,
came on line last year and has 40 MMcf/d
capacity. Latchem says the third plant, the
Big Lake facility in Reagan County, will
be brought on with 200 MMcf/d capacity, bringing total processing capacity to 320
MMcf/d in early 2015. Additional expansions at the Silver complex are planned for
later in 2015.
"All our plants are connected to the
same gathering system," Latchem points
out. "That is a critical consideration for providing our customers with the highest level of service. It's important to stay in front
of the success operators are enjoying in this
area and provide multimarket access."
He says Lucid's gathering system covers 800,000 acres across nine counties in
the Midland Basin, and is serving 25 op-

erating companies.
"The target for everyone is 100 percent
crude," he elaborates. "But 30-35 percent of
the production is associated gas, with a por-

130 THE AMERICAN OIL & GAS REPORTER

tion of that being NGLs. In the Wolfcamp,
it is 65-70 percent crude oil, 20-25 percent
natural gas, and 10-15 percent NGLs."
Latchem adds that 90 percent of Lucid's
gathering system is gas, but the company's
goal is to get to 50 percent gas and 50 percent crude oil.
One thing Lucid Energy has done differently from its competition is to install
nitrogen rejection capability at its processing facilities. "A lot of downstream gas
pipelines have low-nitrogen specifications,"
he explains. "We are treating residue gas to
bring the nitrogen below downstream specs
to provide flow assurance for our customers."
Latchem says the big push by both operators and shippers in the Permian Basin
is to get crude oil directly to the refineries on the Gulf Coast without having to go
through the Cushing, Ok., hub. The new
BridgeTex pipeline, which will take crude
oil directly from Colorado City, Tx., to the
Gulf Coast, is expected to come on line in
the third quarter.
"Shippers and operators are quickly
moving in that direction," he contends. "We
are a feeder system to take the crude oil
production wherever our customer wants

Rangeland Energy's RIO (Rangeland Integrated Oil) System is being built to serve the
Delaware Basin region in southeastern New Mexico and far West Texas. It consists of a
rail facility north of Loving, N.M., which will be served by BNSF Railroad, plus 30- and
104-mile pipelines that will carry crude oil from the Loving hub to the State Line Terminal in Reeves County, Tx., and on to Midland.

American Oil and Gas Reporter - June 2014

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