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Five Eagle Ford Companies To Watch As United States Becomes Natural Gas Exporter

News Article by Tempo Resources

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So far this year, American crude oil exports have been getting all the attention, but natural gas exports are expected to do far more business in terms of volume and perhaps, profits.

The U.S. Energy Information Administration released a report on Friday stating that natural gas imports will move down to zero over the next 16 months. It will be the first time since 1955 that the United States is exporting more natural gas than it imports.

By some estimates the United States is sitting on a 150-year surplus and is expected to become a net exporter of natural gas to Latin America, Europe and Asia.

With hundreds of miles of natural gas pipelines heading from the Eagle Ford and Permian Basin to the Gulf Coast, the liquefied natural gas industry is poised to deliver the majority of those exports.

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Cheniere Energy‘s Sabine Pass LNG export terminal in neighboring Louisiana is expected to come on-line in the first quarter of 2016 making natural gas exports a reality. Meanwhile, two more LNG export terminals are being built along the Texas Gulf Coast in Corpus Christi and Freeport while another is proposed in Port Arthur and three more are proposed for the Port of Brownsville.

Another export opportunity for natural gas producers is to sell it south of the border where the Mexican government is building hundreds of miles of natural gas pipelines to meet growing demand for power plants as well as automotive and aerospace factories. Mexico’s Federal Electricity Commission has budgeted billions of dollars for pipelines on both sides of the border. The agency’s website shows that a $1.5 million project to build a natural gas pipeline from Corpus Christi to Brownsville is still up for bid.

A review of natural gas production companies and midstream companies in San Antonio and the Eagle Ford shows that five of them are notably poised to benefit from the natural gas market conditions in 2016:

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Howard Energy Partners

Last August, Howard Energy Partners announced that it will build a 200-mile cross-border pipeline to deliver 600 million cubic feet of natural gas per day to power plants near Monterrey. The San Antonio-based company has lucrative acreage and facilities in Webb County, which the Texas Railroad Commission ranks as the number one county for natural gas in the Lone Star State. Once the cross-border pipeline is complete, the privately owned company will have the ability to ship natural gas to either Mexico or the Texas Gulf Coast.

Lewis Energy Group

Out of the natural gas production companies based in San Antonio, Lewis Energy is at the top of the list. With lucrative acreage in the methane-rich lands of La Salle, Webb and Dimmit Counties, the company produced more than 14.7 billion cubic feet of natural gas in September 2014 alone, Texas Railroad Commission figures show. Pipeline networks allow the privately owned company to easily move the natural gas to either the Gulf Coast or south of the border.

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Energy Transfer Partners

Midstream company Enterprise Transfer Partners (NYSE: ETP) has natural gas pipelines and terminals in both the Eagle Ford and Permian Basin. Those pipelines can move natural gas to the Gulf Coast but the Dallas-based company spent 2015 building up its infrastructure for exports. ETP already has natural gas export capabilities in Webb County and the Rio Grande Valley. Working in a consortium with Mastec and Carso Energy, ETP also won two contracts worth a combined $1.1 billion to connect natural fields in the Permian Basin to the State of Chihuahua. ETP has also invested in the Lake Charles LNG export terminal in Louisiana in order to become a player in overseas markets.

Sanchez Energy

With its “Catarina Field” including tens of thousands of acres in the natural gas-rich lands of La Salle, Dimmit and Webb Counties, Sanchez Energy Corp. (NYSE: SN) is also poised to benefit from natural gas exports. The Houston-based company recently invested $115 million into a joint venture with Targa Resources Partners LP (NYSE: NGLS) to beef up its midstream infrastructure in the Eagle Ford and connect their natural gas facilities to Mexico and the Gulf Coast.

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Flint Hills Resources

An LNG liquefaction plant owned by Houston-based Stabilis Energy is already in operation about an hour south of San Antonio in the Eagle Ford town of George West but Flint Hills Resources wants to export it. The Kansas-based company has asked the federal government for permission to take LNG produced at the Stabilis plant, load it into ISO containers and ship it to overseas customers using the Port of Corpus Christi or other locations along the Texas Gulf Coast. If approved, the project could beat export terminals currently under construction to the global market.

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