Howard Energy Partners and NextEra Energy Partners (NYSE: NEP) formed a joint venture (JV) on Feb. 13 to develop additional natural gas transportation opportunities in the Eagle Ford shale region of South Texas, the companies said in a joint press release.
The JV intends to market capacity on NextEra’s Eagle Ford Midstream system (EFM) and Howard’s Eagle Ford Gathering system (EFG) and to evaluate additional pipeline opportunities in an area of mutual interest in South Texas, which includes Webb, Duval, Zapata, Dimmit, La Salle, McMullen, Live Oak and Jim Wells counties.
Mike Howard, Howard Energy Partners’ chairman and CEO, said the synergies between his company and NextEra’s Eagle Ford assets provide for a compelling footprint.
“The connection to NextEra Energy Partners’ EFM system provides an efficient option to expand capacity on our EFG system, as well as providing our producers a direct link to Agua Dulce, bringing new supplies to the emerging markets in Mexico and the Texas Gulf Coast,” Howard said in a statement.
Howard’s existing EFG system, located in Webb, consists of about 215 miles of lean gas gathering pipeline with roughly 1 billion cubic feet per day of throughput capacity. NextEra’s existing EFM system is a roughly 150-mile, 30-inch and 16-inch lean gas transportation pipeline originating in La Salle, spanning portions of McMullen, Duval, Jim Wells and Nueces counties, and terminating at the Agua Dulce hub in Nueces County.
While requiring minimal capital investment, NextEra President Armando Pimentel said the JV agreement is expected to increase capacity utilization on the company’s EFM system and improve gross margins by giving NextEra access to additional producer volumes in an active Eagle Ford region.
Further, since the JV is based on future commitments on NextEra’s EFM and Howard’s EFG assets, existing contracts and revenue streams will not be impacted, Pimentel added.
“This is another good example of organic growth opportunities for NextEra Energy Partners in our Texas Pipeline portfolio,” he said in a statement.
Bids must be submitted by Feb. 19.
The American Petroleum Institute (API) has launched a new certification program that will help pipeline operators use integrity testing of natural gas and oil pipeline to improve safety and avoid environmental releases.
Crude line connects the company’s Midland Terminal to long-haul pipes originating at Crane, Texas.