Elevate Midstream Partners LLC, a full-service midstream company headquartered in Houston, said Aug. 19 that it has entered into an eight-year gas gathering and treating agreement with Sabine Oil and Gas Corp.
Sabine Oil and Gas is a major Haynesville producer in Harrison and Panola counties, Texas. The transaction was completed in partnership with Elevate’s financial sponsor, Tailwater Capital, an energy-focused private equity firm based in Dallas.
Elevate will build about 19 miles of 16-inch gas gathering pipelines plus associated laterals, including amine, dehydration and compression facilities in the Carthage area with interconnections to downstream takeaway markets. The system adds to Elevate’s existing asset base in the area and is designed to support both this agreement and aid other producers in moving gas to more attractive markets at the Carthage hub.
“We are pleased to announce the execution of this agreement with Sabine and commencement of this project,” said Roger Fox, CEO of Elevate. “With our existing assets strategically located in the core of the Haynesville and Cotton Valley formations, this new pipeline will both expand our footprint and provide access to the competitive Carthage hub markets for our customers.
“We are delighted that Sabine, our anchor customer, has entrusted us to build our pipeline and continue to service their ambitious needs. We will be looking to similarly assist other customers in the region to connect, via our pipeline, to more favorable markets that ultimately will access the increasing Gulf Coast demand.”
Limited natural gas pipeline takeaway capacity from the region has kept prices very low, or even negative, in recent months, a report from the EIA says.
Prices and margins improve across the NGL spectrum.
Higher NGL prices combined with slumping natural gas prices to producer expanded margins.