Howard Midstream Expands Natural Gas and Renewable Diesel Operations

Howard Midstream Energy Partners, also known as Howard Energy Partners (HEP), has successfully concluded a series of projects aimed at expanding pipeline, processing, and storage capacities. These initiatives were strategically undertaken to accommodate the increased production of natural gas from the Delaware and Eagle Ford basins in Texas, along with supporting renewable diesel operations at the US Gulf Coast (USGC).

In collaboration with Dos Caminos LLC, a joint venture with Eagle Ford Midstream LP (an indirect subsidiary of NextEra Energy Partners LP), HEP achieved a significant milestone by completing the construction of its new South Texas natural gas pipeline ahead of schedule in early November.

Simultaneously, in the Stateline region of the Permian's Delaware Basin, HEP, operating on behalf of Catalyst Midstream Partners LLC, confirmed the completion of an expansion at the Stateline gas processing complex in Orla, Texas. The addition of the 200-million cubic feet per day (MMcfd) Train 3 has augmented the complex's total processing capacity to over 600 MMcfd. Catalyst Midstream Partners LLC, jointly owned by HEP and partner Devon Energy Corp., has received dedicated production from 50,000 net acres in the Stateline area, subject to fixed-fee oil gathering and natural gas processing agreements with Devon through 2038.

Further extending its footprint, HEP concluded the expansion of its midstream terminal in Port Arthur, Texas, in 2023. This expansion, executed in collaboration with Diamond Green Diesel Holdings LLC (DGD), a joint venture of Valero Energy Corp. and Darling Ingredients Inc., supports DGD's new 470-million gallon per year renewable diesel plant at Valero's Port Arthur refinery. The expansion includes additional tank storage, pipelines, rail track, and other infrastructure to accommodate renewable diesel feedstock and finished product. The Port Arthur terminal now features almost 2 million barrels of storage, extensive rail track, barge docks, deep-water docks, and pipeline connectivity to local refiners and industrial plants.

Alongside the DGD expansion, HEP commissioned installations at the Port Arthur terminal to handle refinery-grade and polymer-grade propylene, further enhancing its capabilities. The successful completion of these growth projects, totaling $800 million, in 2023 marks a remarkable achievement for HEP. Notably, the projects were executed with a perfect safety record, demonstrating HEP's commitment to operational excellence and safety.

As of 2023, HEP's natural gas and terminalling systems are experiencing record volumes, with averages exceeding 2.5 bcfd and 160,000 barrels per day (b/d), respectively. These figures represent a 7% and 25% increase over 2022 levels. Looking ahead to 2024, Mike Howard, HEP's Chairman and CEO, emphasized the company's robust liquidity position, nearly $1 billion, enabling quick execution on new opportunities and sustaining their growth trajectory. The successful execution of these expansion projects positions HEP as a key player in the evolving landscape of natural gas and renewable diesel operations.