GE acquires stake in Texas natural gas pipeline operator

GE Energy Financial Services has acquired a 30.6% stake in Howard Energy Partners, the owner of 280 miles of natural gas pipelines in the Eagle Ford Shale of South Texas, for an undisclosed amount.

Howard Energy will double its size by using the investment to partially fund the acquisition of Meritage Midstream Services’ natural gas gathering assets in South Texas.

Crosstex Energy, Quanta and Clear Springs Energy will fund Howard’s acquisition through equity investments.

GE Energy Financial Services managing director John Shepherd said the shale boom has created the need for a dramatic build out of oil and gas infrastructure in North America.

"This fits perfectly with our strategy of working with expert management teams to meet rapidly growing producer demand for infrastructure. It plays to our strengths of flexibility in transaction structuring to meet our partners’ needs, our access to large amounts of capital and GE’s broad and deep shale expertise."

The acquisition will include 185 miles of Meritage pipelines including the Eagle Ford Escondido gathering system and the Cuervo Creek gathering system, a wet gas stream with gas liquids content.

GE said that Howard plan to expand these systems to meet natural gas demand by ramping up drilling in multiple geologic formations, including the Escondido, Olmos, San Miguel, Austin Chalk and Eagle Ford shale.