Harvest Midstream is poised to take full ownership of some South Texas crude oil transportation and logistics assets as it seeks to expand services for upstream and downstream customers in the Eagle Ford Shale.
The privately held midstream company announced a purchase and sale agreement to acquire the remaining 75% stake in Arrowhead ST Holdings LLC (ASTH) from its joint venture partner. ASTH delivers to numerous crude export docks and into the Flint Hills Corpus Christi and Valero Three Rivers refineries on the Texas coast.
“This is another example of our continued commitment to South Texas and the Gulf Coast,” said CEO Jason Rebrook. “We believe strongly in the outlook for the Eagle Ford as a top producing oil basin.”
The ASTH system includes about 515 miles of pipeline with a total throughput capacity of 380,000 b/d. The system is a key link between the Eagle Ford producers and Corpus Christi, the leading crude export market in the United States.
Last September, Houston-based Harvest brought online two connections in South Texas to deliver crude from its Ingleside Pipeline to facilities now owned by Enbridge Inc. The first connection provides shippers access from the Ingleside system to the Ingleside Energy Center, previously owned by Moda Midstream Operating LLC. The Ingleside Energy Center also has connectivity to the Gray Oak and Epic Crude Oil pipelines, which move Permian Basin and Eagle Ford oil supply south. The second connection is bidirectional between the Ingleside Pipeline and the nearby Taft Terminal to allow it to receive crude volumes to and from the Ingleside system.
The Harvest deal comes as liquid fuels consumption is set to rise over the next two years, according to the latest projections from the Energy Information Administration (EIA).
In the latest Short-Term Energy Outlook, the agency said the world consumed 96.9 million b/d on average in 2021, a 5.0 million b/d year/year increase following the impacts of the Covid-19 pandemic in 2020. Consumption is poised to grow 3.6 million b/d this year and another 1.8 million b/d in 2023, according to EIA.
The ASTH purchase is expected to close by the end of March, pending regulatory approval.
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