Lower 48 midstream giant Howard Energy Partners (HEP), through a joint venture Dos Caminos LLC, plans to double its natural gas gathering, treatment and transport services in Texas to 2 Bcf/d as it eyes opportunities for LNG and Mexico exports.
The expansion, planned in the Austin Chalk formation and Eagle Ford Shale in South Texas, would be done through HEP’s partnership with an affiliate of Eagle Ford Midstream LP (EFM).
“Given our unique pipeline footprint and history in South Texas, we are best located to respond to the significant natural gas production growth in the Webb County area,” said HEP CEO Mike Howard.
“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 throughput would be expanded by enhancing existing systems and greenfield projects.
San Antonio-based HEP operates Dos Caminos. Together with EFM, whose 158-mile pipeline runs through the Eagle Ford, HEP now gathers, treats and transports up to 1 Bcf/d, which is destined for Mexico and Gulf Coast liquefied natural gas exports.
Mexico Connection: Nueva Era
HEP also is co-owner, via a 50/50 joint venture with Mexico’s Grupo Clisa, of Nueva Era Pipeline LLC, a 190-mile, 30-inch diameter pipeline connecting the Webb County hub with the industrial center of Monterrey, Mexico. Mexican state power utility Comisión Federal de Electricidad (CFE) is the anchor shipper on Nueva Era.
South Texas remains the dominant source of Mexico’s pipeline natural gas imports from the United States, although West Texas is gaining ground as new infrastructure comes online.
Imports accounted for 84% of Mexico’s gas supply as of March, excluding gas consumed by state oil company Petróleos Mexicanos, according to government data. The US Energy Information Administration, meanwhile, expects US natural gas pipeline exports – almost all of which flow to Mexico – to rise by 4% year/year in 2022 and another 4% in 2023.
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CFE, for its part, announced a series of preliminary agreements this week with Sempra Infrastructure to advance LNG and natural gas pipeline exports in Mexico, bolstering the outlook for continued growth in US imports.
HEP owns and operates a long list of energy infrastructure across the Lower 48 including gas pipelines, gas processing plants, refined products storage terminals, deepwater dock/rail facilities, fractionation facilities and hydrogen production facilities.
In 2019, HEP completed two bulk liquid terminal facility expansions along the Texas coast that increased its Gulf Coast terminal storage capacity by a combined 2.6 million bbl. HEP also in 2019 expanded its midstream operations in the Permian Basin and in Oklahoma’s STACK, aka the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties.
Andrew Baker contributed to this story.