Howard Midstream Energy Partners LLC (HEP) announced that it will construct a cryogenic natural gas plant that will process 200 million cubic feet of gas per day. In addition, the company has begun construction on an import and export logistics railroad hub for oil field related services and products, including condensate and natural gas liquids.
Both facilities will serve primarily producer and midstream customers operating in the Olmos, Escondido, and Eagle Ford Shale plays in South Texas. Total cost of the projects is approximately $100 million.
The new Reveille cryogenic natural gas processing plant and associated pipelines will be located in Webb County TX. The facilities will tie into the Cuervo Creek gathering pipeline system that HEP acquired in March 2012. Plant construction is scheduled to begin in April with start-up of the facilities anticipated in January 2014. The plant is designed for multiple rich natural gas geologic formations including the Olmos, Escondido, and Eagle Ford.
HEP has signed long-term natural gas gathering and processing contracts with Escondido Resources II and Laredo Energy that support the construction of the Reveille plant. The agreements add to HEP’s guaranteed minimum throughput of natural gas fee-based commitments to their system, bringing the total to more than 350 billion cubic feet (Bcf). The company is aggressively seeking additional customers for the plant.
In addition to the Reveille plant, HEP is constructing an industrial logistics railroad hub in Live Oak County TX on approximately 260 acres in the heart of the Eagle Ford. The Live Oak Rail Hub will be a major South Texas industrial hub that is capable of handling manifest and unit trains transporting multiple types of cargo, including crude oil, condensate, natural gas liquids, water, pipe, and sand used in the hydraulic fracturing process.
HEP began construction of the Live Oak Rail Hub’s rail switch in January and expects the hub will accommodate manifest trains in May 2013. The hub site is near US Highway 281 south of Three Rivers, Texas, and will access the Union Pacific Railroad line that runs from San Antonio to Corpus Christi, as well as numerous pipelines in the area that will transport oil and condensate. HEP is actively seeking third party tenants that can use the facility for Eagle Ford or other industrial related products and services.