Strategic Partnership for Salt Dome Storage Project in Texas

Vecino Energy and DRW Agreement on Storage Development

Vecino Energy Partners, LLC (“Vecino”) has formed an exciting collaboration with DRW Energy Trading LLC (“DRW”), establishing a framework for developing the Piedras Pintas Salt Dome in Texas. This significant undertaking focuses on creating an intrastate natural gas storage service, which is crucial for the region’s energy needs.

Project Details and Infrastructure Plans

Following a final investment decision (“FID”), Vecino plans to commence construction on a groundbreaking hydrocarbon storage facility at Piedras Pintas in Duval County. This strategic location gives Vecino control over considerable surface and mineral rights, enabling the development of both gas and liquids storage capabilities. The project promises to rival existing infrastructure with an impressive capacity of over 50 billion cubic feet (Bcf) for natural gas and more than 100 million barrels (Mmbbls) for liquids storage.

Connecting to Major Regions

This innovative storage solution will provide vital connectivity to Agua Dulce, marking it as the nearest salt dome storage to significant locations such as Corpus Christi, Brownsville, and Mexico. Such strategic positioning aims to bolster the energy supply chain in this dynamic region.

Phased Development Approach

The development will occur in several phases, initiating with Phase I, which includes the construction of two natural gas storage caverns. Accompanying infrastructure and a newly constructed 40-mile pipeline will ensure direct access from the storage facility to the gas hub at Agua Dulce. Anticipated in-service dates for these caverns are projected for 2028 and 2029, contingent upon necessary approvals and FID.

DRW's Role and Commitment

In this partnership, DRW is set to be the anchor customer, providing significant backing for the gas caverns planned under Phase I. With its extensive market know-how, DRW’s involvement is pivotal for the project’s success, positioning it as a substantial shipper and investor in the area. This endeavor demonstrates DRW’s dedication to enhancing energy infrastructure, particularly along the Texas-Mexico border, while emphasizing innovative solutions for the energy market.

Expert Insights on Energy Market Dynamics

Vecino’s Executive Vice President of Origination, Nelson Ferries, acknowledges the challenges posed by natural gas volatility faced by producers, marketers, and industrial users. He emphasizes that this facility is designed to adeptly navigate short-term market fluctuations. Furthermore, the development of natural gas and liquids storage at this site may catalyze further industrial growth in proximity to Corpus Christi and Brownsville.

Jonathan Harms, Managing Director of Energy Origination for DRW, sees the project as a cornerstone for strengthening energy infrastructure in a vital region. He foresees additional natural gas storage capacity spurring future developments in the LNG sector and enhancing pipeline connectivity between the US and Mexico.

Contact Information for Inquiries

For questions regarding storage capacity, customers can connect with David Ash, Vecino’s President, by calling (210) 569-6747. Inquiries specifically related to DRW’s role can be directed to Jonathan Harms at (832) 278-0517.

About Vecino Energy Partners

Founded in 2022, Vecino Energy Partners is dedicated to infrastructure development that supports the domestic oil and gas sector. With experienced management dedicated to both upstream and midstream endeavors, Vecino focuses on delivering tailored solutions to industry partners.

About EnCap Flatrock Midstream

EnCap Flatrock Midstream is committed to investing in midstream infrastructure across North America, having raised nearly $10 billion since its inception. The firm continues to align with skilled management teams to foster growth opportunities in the sector.

About DRW

DRW is a leading global trading firm with vast experience across multiple asset classes, focusing heavily on North American energy markets. The company’s energy division employs a diverse team of professionals to tackle complex challenges in the energy sector, ensuring a balance between supply and demand in critical areas.

Frequently Asked Questions

What is the main goal of the Vecino and DRW partnership?

The main goal is to develop the Piedras Pintas Salt Dome for natural gas storage to support intrastate energy demands.

What capacity is planned for the storage project?

The project anticipates over 50 billion cubic feet of natural gas and 100 million barrels of liquids storage.

When are the anticipated in-service dates for Phase I?

Phase I has projected in-service dates around 2028 and 2029, contingent on approvals.

Who is the anchor customer for the storage project?

DRW will serve as the anchor customer, supporting the gas caverns' development.

How can businesses inquire about storage capacity?

Businesses can contact David Ash at Vecino Energy for inquiries regarding storage capacity availability.

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