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July 27, 2022

Howard Energy plans to expand natural gas supply capacity in Texas

The midstream company plans to double natural gas gathering, treatment, and transport services in South Texas.

Midstream energy company Howard Energy Partners (HEP) is planning to increase the capacity of its natural gas transportation system in South Texas, US.

Through its joint venture (JV) Dos Caminos, the firm plans to expand its capabilities to gather, treat, and transport natural gas produced from the Austin Chalk and Eagle Ford shale plays in and around Webb County, Texas.

Dos Caminos is a JV between HEP and Eagle Ford Midstream’s (EFM) affiliate.

HEP and EFM’s systems currently have the capacity to gather, treat, and transport up to one billion cubic feet per day (bcf/d) of gas to markets, including Mexico and Gulf Coast LNG.

In addition to the ongoing improvements to existing systems, Dos Caminos plans to undertake new greenfield pipeline projects to nearly double the throughput capacity to a total of up to 2bcf/d.

HEP CEO Mike Howard said: “Given our unique pipeline footprint and history in South Texas, we are best situated to respond to the significant natural gas production growth in the Webb County area.

“These projects will be completed in phases, with the initial phase anticipated to be completed in the third quarter of next year and the remainder in 2024.”

Dos Caminos is operated by HEP and was created to focus on the development of additional transportation capacity for natural gas produced in the Eagle Ford shale region of South Texas. It also markets capacity on HEP and EFM’s existing South Texas systems.

In a separate announcement, Astatine Investment Partners announced that it is looking to divest its 38% stake in Howard Energy Partners, reported Bloomberg, citing people familiar with the matter.

A potential deal could value Howard Energy Partners approximately $2bn, one of the sources said.

The sale forms part of Alinda’s strategy to stop investments in the midstream energy sector, including pipelines and processing plants, to shift towards more environmentally friendly projects.

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