Howard Energy Partners (HEP) and NextEra Energy Partners (NYSE: NEP) jointly announced today that they entered into a joint venture to develop additional natural gas transportation opportunities in the Eagle Ford shale region of South Texas.
The joint venture intends to market capacity on NextEra Energy Partners’ Eagle Ford Midstream system (EFM) and HEP’s Eagle Ford Gathering system (EFG) and to evaluate additional pipeline opportunities in an area of mutual interest, which includes Webb, Duval, Zapata, Dimmit, La Salle, McMullen, Live Oak and Jim Wells counties.
“The synergies between HEP’s and NextEra Energy Partners’ Eagle Ford assets provide for a compelling footprint, and we are excited about the potential for this joint venture,” said Mike Howard, HEP Chairman and Chief Executive Officer. “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.”
Armando Pimentel, NextEra Energy Partners President, stated, “This is another good example of organic growth opportunities for NextEra Energy Partners in our Texas Pipeline portfolio. While requiring minimal capital investment, this agreement is expected to increase capacity utilization on NEP’s EFM system and improve gross margins by giving NEP access to additional producer volumes in an active Eagle Ford region. Since the joint venture is based on future commitments on NEP’s EFM and HEP’s EFG assets, existing contracts and revenue streams will not be impacted.”
HEP’s existing EFG system, located in Webb County, consists of approximately 215 miles of lean gas gathering pipeline with approximately 1 billion cubic feet per day of throughput capacity. NextEra Energy Partners’ existing EFM system is an approximately 150-mile, 30-inch and 16-inch lean gas transportation pipeline originating in La Salle County, spanning portions of McMullen, Duval, Jim Wells, and Nueces counties, and terminating at the Agua Dulce hub in Nueces County.
Source: Company Press Release