SAN ANTONIO, Texas, January 21, 2025–(BUSINESS WIRE)–Vecino Energy Partners, LLC (“Vecino”), a portfolio company of EnCap Flatrock Midstream, and DRW Energy Trading LLC (“DRW”) have entered into a Memorandum of Understanding (“MOU”) outlining certain material terms and conditions supporting the development of the Piedras Pintas Salt Dome (“Piedras Pintas”) for intrastate natural gas storage service.
Upon final investment decision (“FID”) and execution of definitive agreements, Vecino will construct a greenfield hydrocarbon storage project on Piedras Pintas in Duval County, Texas. Vecino controls enough surface and mineral interests to develop both a gas and liquids storage business rivaling the premier facilities on the Gulf Coast with room for over 50 billion cubic feet (Bcf) of high-deliverability natural gas capacity, over 100 million barrels (Mmbbls) of liquids storage or a combination thereof. The Project will offer connectivity to Agua Dulce and be the closest salt dome storage to Corpus Christi, Brownsville and Mexico.
The project will be developed in multiple phases with Phase I consisting of two natural gas storage caverns, associated infrastructure and a newly-constructed 40-mile pipeline directly connecting the Project to the natural gas hub at Agua Dulce. Subject to FID and requisite approvals, Phase I natural gas storage caverns have anticipated in-service dates in 2028 and 2029.
DRW will serve as the anchor customer for the project, underwriting the gas caverns in Phase I. DRW, with its deep market expertise, will also play a key role in ensuring the project’s success as a major shipper and investor in the region. This project underscores DRW’s commitment to advancing energy infrastructure along the Texas-Mexico border and its strategic focus on providing innovative, market-driven solutions to the energy industry.
“We are pleased to work with the team at DRW on this exciting opportunity,” said Nelson Ferries, Vecino’s Executive Vice President of Origination. “Natural gas volatility continues to be a real challenge for producers, marketers and industrial users, and this facility is specifically designed to navigate those short-term market dislocations. Furthermore, we believe that natural gas and liquid storage at this location will help unlock further industrial development near Corpus Christi and Brownsville.”
“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 US 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.”
