Dallas-based natural gas pipeline and processing company, Lucid Energy Group, has reportedly signed a long-term deal with Marathon Oil Corporation’s subsidiary, Marathon Oil Permian LLC. As per trusted sources, the deal entails Lucid Energy to handle gathering operations to all of Marathon operational acreage in Lea County as well as a portion of its acreage in Eddy County, New Mexico.

If reports are to be believed, both Lea and Eddy County are parts of the Permian Basin, which is apparently the largest sedimentary basin stretching from West Texas into New Mexico and the most productive shale play in the country.

As per an official report, the U.S. Department of Energy states that natural gas production in Permian is second largest in ranking after the Appalachia region in the eastern U.S. and has grown by 31.3% last year, if estimates are to be relied on.

In addition to the long-term gathering agreement, Lucid plans to commission a cryogenic processing plant at its Red Hills natural gas processing facility in Lea county. Apparently, the company claims that its Red Hill III natural gas plant will effectively be capable of processing 200 MMcf (million cubic feet) natural gas per day and is scheduled to commence operation from October 2018. Reportedly, the plant would be Lucid Energy’s fifth natural gas plant in southeast New Mexico and would eventually bring the company’s regional processing capacity in the Delaware Basin to about 750 MMcf a day.

The Red Hills III plant is anticipated to offer additional gas processing capacity in support to the near-term production from commercial agreements with the Marathon agreement, claims the company’s official statement.

Moreover, sources familiar with the matter state, Lucid has successfully commissioned its Red Hills II cryogenic natural gas processing plant in Lea County in New Mexico in May 2017.