Howard Energy Partners to buy S. Texas gas gathering systems

By OGJ editors

Howard Energy Partners agreed to acquire natural gas gathering assets in South Texas from Meritage Midstream Services. The acquisition involves the Eagle Ford Escondido Gathering System, which is partially owned by Laredo Energy, and the Cuervo Creek Gathering System.

Terms of the transaction were not immediately available.

Both systems are primarily 12-in. to 16-in. high-pressure gas pipelines in Webb County, Tex. The transaction is expected to close in April, subject to regulatory approvals and customary closing conditions.

The two systems involve 83 miles of pipeline, a 102-mile lean gas gathering system, two leased amine treating plants, and multiple intrastate pipeline outlets for regional processing and transportation. The systems are supported by multiple long-term fee based agreements with more than 180,000 dedicated acres and more than 200 bcf of total volume commitments.

The lean and rich gas pipelines have a combined capacity of 400 MMcfd of gas, of which 80% of the firm capacity is under contract. HEP expects to expand the systems to provide gas gathering from multiple formations, including the Escondido, Olmos, San Miguel, Austin chalk, and Eagle Ford shale.

After closing, HEP of San Antonio, will own and operate about 450 miles of gas gathering pipelines in Webb, Dimmit, Frio, Maverick and Zavala counties.

These systems currently gather more than 175 MMcfd and have the ability to quickly expand capacity as drilling continues to increase in HEP’s area of operation.

Meritage Midstream is based in Golden, Colo.

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