Harvest Midstream is poised to take full ownership of certain South Texas crude oil transportation and logistics assets as it seeks to expand services for upstream and downstream customers in the Eagle Ford shales .
The private intermediary company announced a purchase and sale agreement to acquire the remaining 75% interest in Arrowhead ST Holdings LLC (ASTH) from its joint venture partner. ASTH delivers to numerous crude export docks and 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 strongly believe in Eagle Ford’s prospects as the most productive oil basin.”
The ASTH system comprises approximately 515 miles of pipeline with a total throughput capacity of 380,000 bpd. The system is a key link between Eagle Ford producers and Corpus Christi, the largest rough export market in the United States.
Last September, Houston-based Harvest brought two connections in South Texas online to deliver crude from its Ingleside pipeline to facilities now owned by Enbridge Inc. The first connection allows shippers to access the Ingleside system to the Ingleside Energy Center, formerly owned by Moda Midstream. Operating SARL. The Ingleside Energy Hub is also connected to the Gray Oak and Epic crude oil pipelines, which carry oil supplies from the Permian Basin and Eagle Ford to the south. The second connection is bi-directional between the Ingleside pipeline and the nearby Taft terminal to enable it to receive crude volumes to and from the Ingleside system.
The Harvest deal comes as consumption of liquid fuels is expected to increase 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, an increase of 5.0 million b/d per year following the impacts of the Covid-19 pandemic in 2020. Consumption is in equilibrium will increase by 3.6 million b/d this year and another 1.8 million b/d in 2023, according to the EIA.
The purchase of ASTH is expected to be finalized by the end of March, pending regulatory approval.