Howard Midstream wraps major expansion projects

Jan. 16, 2024
Howard Midstream Energy Partners has completed a series of projects to expand pipeline, processing, and storage capacities for accommodating increased production of natural gas from the Delaware and Eagle Ford basins.

Howard Midstream Energy Partners LLC (dba Howard Energy Partners, HEP) has completed a series of projects to expand pipeline, processing, and storage capacities for accommodating increased production of natural gas from the Delaware and Eagle Ford basins of Texas, as well as renewable diesel at the US Gulf Coast (USGC).

As operator of its Dos Caminos LLC joint venture with Eagle Ford Midstream LP—an indirect subsidiary of NextEra Energy Partners LP—HEP completed construction of its new South Texas natural gas pipeline and associated treating and compression installations in early November, a month ahead of schedule, HEP said on Dec. 13.

Known as the Spears expansion, the project includes a 62-mile, 36-in. pipeline—as well as compression, treating, and dehydration—starting near HEP’s existing infrastructure in Webb County, Tex., and running to Kinder Morgan Inc.’s (KMI) Kinder Morgan Texas Pipeline (KMTP) compressor station near Freer, Tex., providing HEP’s South Texas customers the ability to transport up to 1 bcfd of incremental natural gas volumes to USGC LNG customers, the operator said.

Dos Caminos’ Spears project comes alongside KMI subsidiary Kinder Morgan Tejas Pipeline LLC’s construction of a new 67-mile, 42-in. pipeline from the existing KMTP compressor station near Freer to the Tejas pipeline system near Sinton, Tex., as part of the two operators’ combined 2-bcfd expansion of their respective Eagle Ford gas transportation systems that, together, will create a critical supply link to meet anticipated rising demand for Eagle Ford low-nitrogen gas from USGC power generators, industrial customers, and LNG exporters.

By 2050, forecasted demand for Eagle Ford gas at the USGC is slated to increase by 152% from current levels, HEP said.

In the Stateline region of the Permian’s Delaware basin, HEP also confirmed its jointly owned Catalyst Midstream Partners LLC—which HEP operates on behalf of partner Devon Energy Corp.—has completed an expansion of the Stateline gas processing complex in Orla, Tex., with addition of the 200-MMcfd Train 3, boosting the complex’s total processing capacity to more than 600 MMcfd.

Devon, which acquired interest in Catalyst through its 2021 merger with WPX Energy Inc., has dedicated production from 50,000 net acres in the Stateline area to Catalyst’s operations, subject to fixed-fee oil gathering and natural gas processing agreements, through 2038, according to Devon’s third-quarter 2023 report to investors.

Further south, HEP also reached completion in 2023 on the previously announced expansion of its 450-acre midstream terminal in Port Arthur, Tex., to support Diamond Green Diesel Holdings LLC’s (DGD)—a 50-50 joint venture of Valero Energy Corp. and Darling Ingredients Inc.—new 470-million gal/year renewable diesel plant at Valero’s 395,000-b/d Port Arthur refinery, about 90 miles east of Houston.

The completed expansion includes the addition of:

  • 575,000 bbl of tank storage for renewable diesel feedstock and finished product.
  • Three pipelines with associated connections to local refiners.
  • 7 miles of rail track with associated rail loading-unloading capabilities.
  • Truck unloading installations.
  • A second deepwater dock—with additional capacity available for third-party shippers—equipped to accommodate Panamax-sized vessels.

Alongside the DGD expansion works, HEP said it commissioned new installations at the Port Arthur terminal to handle refinery-grade propylene and polymer-grade propylene, including rail transloading spots, pressurized storage, and associated pipelines and pumps connecting the site to a leading global chemical company.

Post-expansion, HEP said the Port Arthur terminal consists of nearly 2 million bbl of storage, 16 miles of rail track with unit train and manifest service from two railroads, three barge docks, two deep-water docks capable of Panamax-class vessel loading, and pipeline connectivity to local refiners and industrial plants.

Completion of the overall $800 million in growth projects comes amid HEP’s achievement of record volumes during the year, the operator said.

HEP’s natural gas and terminalling systems are currently averaging more than 2.5 bcfd and 160,000 b/d, respectively, for 2023, representing corresponding volume increases of 7% and 25% above 2022 levels.

HEP is contemplating future growth plans.

Mike Howard, chairman and chief executive officer, said the company’s “strong liquidity position of nearly $1 billion will allow [HEP] the ability to quickly execute on new opportunities and continue our strong growth trajectory.” Further details have yet to be revealed.