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EnCap Flatrock Midstream portfolio company Vecino Energy Partners LLC and DRW Energy Trading LLC will be developing an intrastate natural gas storage hub together, the companies announced Jan. 21.
Under the memorandum of understanding, the Piedras Pintas Salt Dome will be located in Duval County, Texas, and will connect to the Agua Dulce natural gas hub.
Vecino will build a greenfield hydrocarbon storage project for Piedras Pintas and expects the gas and liquids storage business to have a capacity of 50 Bcf of natural gas or 100 MMbbl of liquids storage, or a combination of the two.
The first phase of the project will include two natural gas storage caverns, associated infrastructure and a 40-mile pipeline connected to Agua Dulce. DRW will underwrite the gas caverns in Phase 1 and is the anchor customer for the project.
Upon making final investment decision, the Phase 1 caverns are expected to have a 2028 and 2029 in-service date.
Piedras Pintas will be the closest salt dome to Corpus Christi, Brownsville and Mexico.
“We believe this project presents an opportunity to help strengthen the energy infrastructure in this critical part of the United States, providing additional natural gas storage to spur future LNG development and strengthen the pipeline between the U.S. and Mexico,” said Jonathan Harms, managing director of energy origination for DRW. “We see substantial new supply and demand coming to this area and we see no asset better positioned to help producers and consumers navigate the local market volatility.”
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