Evolve Transition Infrastructure LP focuses on the acquisition, development, and ownership of infrastructure critical to the transition of energy supply to lower carbon sources. Evolve Transition Infrastructure GP LLC serves as the general partner of the company.
The company owns natural gas gathering systems, pipelines, and processing facilities in South Texas and continues to pursue energy transition infrastructure opportunities. The company is managed by is general partner, which is owned by...
Evolve Transition Infrastructure LP focuses on the acquisition, development, and ownership of infrastructure critical to the transition of energy supply to lower carbon sources. Evolve Transition Infrastructure GP LLC serves as the general partner of the company.
The company owns natural gas gathering systems, pipelines, and processing facilities in South Texas and continues to pursue energy transition infrastructure opportunities. The company is managed by is general partner, which is owned by a subsidiary of Stonepeak Catarina.
Midstream Business
The company’s midstream business primarily consists of the Catarina Gathering System, the Carnero Gathering Line and the Raptor Plant owned by the Carnero JV and the Seco Pipeline. All of the company’s midstream assets are located in the Eagle Ford Shale in South Texas.
Catarina Gathering System
The company’s primary asset is a gathering system (the Catarina Gathering System), which is located on the western portion of Mesquite’s acreage position in Dimmit, La Salle and Webb counties in Texas (such net acreage is collectively referred to herein as Mesquite’s Catarina Asset, and the western portion of such net acreage is individually referred to herein as Western Catarina). The Catarina Gathering System consists of approximately 160 miles of gathering pipelines, four main processing and gathering facilities, including stabilizers, storage tanks, dehydration units, and other related assets in Western Catarina, which are located in Dimmit and Webb counties in Texas, and services upstream production from Mesquite’s Catarina Asset. The company leases gas compression units from Kodiak pursuant to the Kodiak Compression Agreement. The gathering lines range in diameter from four to twelve inches, with a capacity of 200 MMcf/d for natural gas, and 40 one thousand barrels of oil or other liquid hydrocarbons per day (MBbl/d) for crude oil and NGLs. There are four main gathering and processing facilities, which includes eight stabilizers of 5,000 Bbls/d, approximately 25,000 Bbls of storage capacity, pressurized storage for natural gas liquids (NGLs), approximately 15,000 horsepower of compression and approximately 300 million cubic feet of natural gas per day (MMcf/d) of dehydration capacity. The average age of the Catarina Gathering System assets is approximately ten years, and such assets have an average expected life of approximately 19 additional years. The Catarina Gathering System is used solely to support the gathering, processing and transportation of natural gas, NGLs and crude oil produced by Mesquite from Mesquite’s Catarina Asset, for which Mesquite pays the company gathering and processing fees pursuant to the Gathering Agreement. The Catarina Gathering System has oil interconnects with the Plains All American Pipeline, L.P. header system delivered to the Gardendale terminal, and to all four takeaway pipelines to Corpus Christi, and natural gas interconnects with Kinder Morgan Inc., Energy Transfer Operating, L.P. and Targa Resources Corp.
During the year ended December 31, 2022, Mesquite transported average daily production through the Catarina Gathering System of approximately 4.5 MBbls/d of oil, 63.5 MMcf/d of natural gas and 0.5 MBbls/d of water.
Carnero JV
The company owns a 50% equity interest in Carnero G&P LLC (Carnero JV), which is its joint venture with Targa Resources Corp. (Targa). Carnero JV owns and Targa operates the following assets: the 200 MMcf/d cryogenic natural gas processing plant located in Bee County, Texas (Silver Oak II Plant), the 260 MMcf/d cryogenic natural gas processing plant located in La Salle County, Texas (the Raptor Plant), and 45 miles of high pressure natural gas gathering pipelines with a design limited (without compression) of 400 MMcf/d (the Carnero Gathering Line), which connect the Catarina Gathering System to nearby pipelines and the Raptor Plant. Mesquite and its working interest partners dedicated over 315,000 acres located in the Western Eagle Ford on Mesquite’s acreage in Dimmit, Webb, La Salle, Zavala and Maverick counties in Texas (such acreage is collectively referred to herein as Mesquite’s Comanche Asset) to the Carnero JV pursuant to a long-term firm gas gathering and processing agreement.
Seco Pipeline
The company owns and operates a 30-mile natural gas pipeline with a 400 MMcf/d capacity that is designed and used to transport dry gas from the Raptor Plant to multiple markets in South Texas (the Seco Pipeline). The Seco Pipeline has an expected life of approximately 40 years and provides upstream producers with optionality to southern gas markets and creates the potential to export natural gas to premium priced markets in Mexico. From September 1, 2017 to February 12, 2020, the company utilized the Seco Pipeline to provide transportation services to Mesquite pursuant to a firm transportation service agreement (the Seco Pipeline Transportation Agreement).
Title to Properties
Title to the Catarina Gathering System and the Seco Pipeline assets are either owned in fee or derived from leases, easements, rights-of-way, permits or licenses from landowners or governmental authorities, permitting the use of such land for the company’s operations.
Kodiak Sale
On March 11, 2022, the company entered into a purchase and sale agreement with Kodiak Gas Services, LLC (Kodiak), pursuant to which it sold to Kodiak natural gas compression equipment.
On May 9, 2022, the company entered into a purchase and sale agreement with Kodiak, pursuant to which it sold to Kodiak natural gas compression equipment.
Strategy
The company’s business strategy to focus on the ongoing energy transition in the industries in which it operates. The key elements of the company’s strategy are to grow its business through the acquisition and development of infrastructure critical to the transition of energy supply to lower carbon sources; pursue organic investments in its existing operating areas to support growth; and pursue strategic relationships with third-party producers and other companies with operations in the area in which it operates in order to maximize the utilization of its midstream facilities or provide other revenue-generating services.
Marketing and Major Customers
Mesquite Energy, Inc. (Mesquite) accounted for 100% of the company’s total revenue for the year ended December 31, 2022. The company is highly dependent upon Mesquite as its most significant customer, and it expects to derive a substantial portion of its revenue from Mesquite for the foreseeable future.
Governmental Regulation
The Federal Energy Regulatory Commission regulates interstate natural gas transportation rates, terms and conditions of service, which affects the marketing of natural gas that the company produces, as well as the revenues it receives for the sales of its natural gas.
The company’s natural gas and hazardous liquids pipelines are subject to the regulations of the United States Department of Transportation (DOT), Pipeline and Hazardous Materials Safety Administration (PHMSA), promulgated pursuant to the federal pipeline safety laws, 49 U.S.C. §§ 60101 et seq., and comparable state statutes. These regulations have been adopted and incorporated by reference by the Texas Railroad Commission (TRRC), which has assumed pipeline safety oversight authority for intrastate pipeline systems in Texas under an annual certification to PHMSA. TRRC has also adopted certain additional and/or more stringent safety standards applicable to intrastate pipeline systems in Texas.
The company is subject to the requirements of the federal Occupational Safety and Health Act (OSHA), and comparable state laws. These laws and the implementing regulations strictly govern the protection of the health and safety of employees. The OSHA hazard communications standard, OSHA Process Safety Management, the federal Environmental Protection Agency community right-to-know regulations under Title III of the Comprehensive Environmental Response, Compensation and Liability Act and similar state laws require that it organizes and/or discloses information about hazardous materials used or produced in its operations.
History
The company was founded in 2005. It was incorporated in 2005 under the laws of the state of Delaware. The company was formerly known as Constellation Energy Partners LLC and changed its name to Sanchez Production Partners LLC in 2014 and then to Sanchez Production Partners LP in 2015. Further, the company changed its name to Sanchez Midstream Partners LP in 2017 and to Evolve Transition Infrastructure LP in 2021.
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