The opportunities in the Eagle Ford shale and a series longstanding business relationships led to the development of a unique partnership that includes construction and midstream services.

Mike Howard, chairman and chief executive of Howard Midstream Energy Partners LLC, told attendees at Hart Energy's Eagle Ford: Developing Unconventional Gas Conference and Exhibition that the partnership was the result of individuals who had done business together for years prior to the development of the Eagle Ford.

Announced earlier this year, Howard Energy Partners acquired Texas Pipeline LLC and Bottom Line Services LLC for a combined $76 million. Crosstex Energy LP and Quanta Services Inc. each provided $35 million in initial funding in exchange for an equity interest in the partnership. Additional funds were provided by management of the partnership, management of Bottom Line Services and a private investor.

Prior to forming the partnership, Howard was president of midstream services for Energy Transfer Partners LP. Howard told the audience in San Antonio that he wanted to "return to his roots" and to confront the challenges of a smaller enterprise.

"If you're a big enterprise, you have to hunt for elephants and have to kill one pretty regularly to stay on that MLP (master limited partnership) wheel. I wanted to step off that wheel and see if I could kill squirrels for a living," he said.

Bill Davis, executive vice president and chief operating officer at Crosstex, said the company's stake in Howard Energy Partners LP gave it access to the Eagle Ford, an area where it previously had no assets.

"We view this as a great opportunity to invest in the Eagle Ford. We view it as our window on the Eagle Ford shale," he said.

Over the past year, Crosstex has announced about $300 million in new projects to diversify its operations in liquids- rich shale plays. On average, it expects an annual return of about 20% from all of its new projects combined.

Crosstex formed a 50-50 joint venture with Apache Corp. to process up to 50 MMcf per day of natural gas in the Permian basin. In North Texas, Crosstex owns 840 miles of pipeline, three processing plants and two treating plants. About half of its operating cash flow comes from this basin, he said.

Crosstex plans to spend up to $220 million to build a natural gas liquids (NGL) pipeline that will connect the Eunice fractionation facilities to Mont Belvieu supply pipelines. The project will have an initial capacity of 70,000 barrels per day of rawmake liquids. The project also includes the expansion of its Eunice NGL fractionation facilities from 15,000 barrels to 55,000 barrels of NGL per day.

Jim O'Neil, president and chief executive of Quanta Services LLC., told the audience the engineering, procurement and construction company provides services for all major shale basins in the U.S. It has about 16,000 employees nationwide and about $4 billion in annual revenues, most of which comes from the U.S. and Canada.

Prior to Howard Energy Partners, Quanta did not have a presence in the Eagle Ford, which is growing and needs an experienced construction work force with the backing of a large amount of capital. O'Neil said the value of Bottom Line Services is that it is a construction company that has years of successful operations and key customer relationships in the region.

In addition to providing necessary capital, Houston-based Quanta can provide technical expertise and size for large construction projects that the partnership's construction division might otherwise miss.

"We can support Bottom Line with engineering services and construction capabilities so they don't turn down any opportunities," he said.

O'Neil said he has done business with Howard and Crosstex and knows both partners well. "Mike Howard has been a customer of Quanta for years," he said.

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