Q: Can you tell us a bit about yourself, your role and your company?

A: I grew up in Corpus Christi, Texas where my dad owned an engineering firm.  He was tied to the industry, mainly the downstream refining business, and naturally, I was exposed to and interested in engineering from a technical standpoint. After I finished high school, I went to A&M Kingsville to study chemical engineering. My dad's a chemical engineer, my older brother is a civil engineer, and me and my younger brother are chemical engineers; the apple doesn't fall far from the tree. I graduated from A&M Kingsville, then went to work at Citgo Refining as a process engineer. 

A few years later, I met Mike Howard, who was with Energy Transfer at the time, and he told me about their company and growth opportunities running large capital projects. I joined Energy Transfer and spent a lot of time running projects in Louisiana and Texas, taking on a large operations role when the Eagle Ford took off in South Texas. That job took me to 2013 – Mike left Energy Transfer in 2010 and formed Howard Energy in 2011. In 2013, I made the decision to join Howard Energy to run their operations and engineering division

We were still relatively small, predominantly South Texas- based, but the snowball really started at that point. It was fast-paced and really gratifying for a startup company to have that type of success and continue to build out our platform. Fast forward to today – we're in four states and two countries. We have 400 employees and pride ourselves in our ability to be a turnkey midstream operator, but also from a performance standpoint, a prudent operator. We feel like we have the KPIs, statistics, experience and expertise that back that up.

Q: Around a year ago, Howard Energy Partners said it had completed around $800 million in growth projects in 2023. Has this momentum carried over into 2024-25, and what have the main drivers been behind your performance?

A: It starts with our people and our leadership. We are not a large company, so we have to differentiate ourselves from our competitors. We feel like we can counter size with creative thinking, the culture that we drive, the expertise that we have, and by building a strong trust factor. As a service provider, we need to do what we say we are going to do every time – and that starts a reputation, whether it is internal or external – and then we use our creativity to drive a competitive price point.

2023 was a year of execution, with over $800 million in projects going on at one time. I'm extremely proud of our project team of about 30 people. The way we run our projects, operations and engineering are tied at the hip, so the design, the execution, pre-startup reviews, the commissioning – that team is effectively one. We entered 2024 focused on different strategies and execution and completed about $1.1 million in M&A activities – including assets that we identified and ownership in certain JVs that we were able to leverage up. It was a phenomenal year. The past two years have been a good mix in terms of what we foresee going forward. We love greenfield and brownfield execution, we do that very well and it yields a lot of financial benefits for us, but we are also mature enough and have a platform now as we look at M&A activities evolving.

Q: Can you tell us any more about any projects you’re currently working on?

A: We operate in four states and two countries – Mexico, South Texas, West Texas, Oklahoma, we have terminals all along the Gulf Coast, and we are up in Pennsylvania. We are currently very active in terms of interconnects, including small- to mid-sized projects. We just finished a large acquisition with the EPIC pipeline – it is an ethylene pipeline that provides a lot of connectivity – populating more along the Gulf Coast, as far as our asset profile goes. At any given time, we continue to look for opportunities within these geographic regions to expand our footprint.

As far as sourcing new projects goes, we have some exciting things that we are looking at – large M&A activities and large expansion projects with new customers. The Delaware Basin is going to be a hot zone for us with a lot of drilling activity. If you look at the overall count for drilling rigs, the majority of that is in the Midland/Delaware Basin. We have a strong partnership with Devon Energy, and we're excited about the next 12-month outlook. If you go down to our Gulf Coast and terminal business, we're being inundated with requests on various projects, and part of our business development team is focused on power generation, including the dynamics in terms of population growth, industry growth, and what that translates to as far as newbuilds go. We have the talent and the expertise to play a role in that. There are some adjacent opportunities with power generation within our geographic footprint. We want to be a diverse company from a geographic area and a business line standpoint, and we have worked hard over the past 13 years to develop it. 

The hardest part is just getting started anywhere. And now that we have platforms in some of the most prolific drilling basins in the US, and we have logistics and plant facilities on the Gulf Coast, we think those platforms will be able to leverage new business. But also, we are constantly looking at new geographic areas and determining how to move forward.

Q: Do you expect design and execution strategies for midstream projects to evolve over the coming years, and if so, how?

A: I think a lot of it has to do with technology. From a Howard Energy standpoint, we put a lot of value into being partnership minded. All projects have issues, but how we handle those issues and what the working team does to collaboratively solve the problems makes the difference. We want to continue to build strong partnerships with procurement agents to support us when we conduct a project—buying material, pipeline, compression, terminals and plants. We have 5-, 10-, 20-years of experience with a lot of these providers and with that level of trust, understanding the financial capabilities and strengths of the organization and have people who will fight for each other, we are able to leverage that to keep a compressed timeline and ensure we are ahead of the curve with procurement, supply chain interruptions, and things showing up on time. 

The other bucket that we spend a lot of time on is the execution contractor side. We have in-house project managers, and they are very hands on, but our contractors are no different than our procurement agents – we want to partner with them. Whether it is civil contractors, mechanical, structural, welding applications, I&E programming, purchase power – we need to be in tune and able to bid aggressively. But when we bid projects, we want to bid on providers we know and trust, and not just have a bid sheet to have a bid sheet. 

I see how KPIs, tracking mechanisms, visibility on safety and performance have increased over the past decade. It has been much more visible and is included within our bid evaluations. I also think it's a testament to people getting smarter over time.  Today, the weekly reporting and the progress reporting that we see is phenomenal and I think we will see an expansion of it going forward.

Q: Is there anything else you see as being among the key pillars to successful project execution?

A: It starts with our leadership. I am the Chief Operating Officer; Mike Howard is our CEO. We both started in the field – operating assets, building assets, and were responsible for maintaining assets. I think that is telling, because as you advance in a corporate leadership role, having first-hand appreciation is highly important. The majority of our employees are in operations, about 230 of  our 400 member team runs our day-to-day operations. With experience and historical understanding of what has worked well, we have created an operational, commercial-driven culture. 

We do sometimes feel the burden with talent acquisition as we look to hire and attract people that want to take on more responsibility. They have to be capable of thinking on their feet and have the right mindset to drive our core values every day. We're highly intentional on how we recruit and how we attract employees, and we're purposely slow on the hiring process, because when you have a dynamic system and a special company dynamic, you want to be careful who you let into your circle. 

Our hiring mix is about 50:50, meaning we want very experienced people – regardless of the department – and we want to be looking at mentoring and growing entry level positions accordingly. We're very intentional on how we integrate employees. We are very intentional on goal- setting and mentoring. We drive a large internship program and a lot of people in leadership roles here at the company have progressed over the past decade through the ranks. As we continue to grow, engagement and driving our culture and core values are very dear to our hearts.

When integrate core values and culture, it translates into high performance. We are industry-leading on compliance and safety. We are industry-leading in the execution of projects. And circling back to the commercial customer interaction, we have built a positive reputation in the industry and people know that we are going to take care of them, drive solutions, and be transparent. Our challenge now is how we scale the process. I'm really thankful to be a part of the executive team and have a board of directors where the alignment – as far as our goals and our allocation of resources to ensure that engagement, visibility and talent acquisition philosophy is maintained – is in place and better than it's ever been in the company. As we work hard to maintain that model, I do not think it's a surprise when you go back to the last two years and we have executed close to a billion dollars of projects, and then another billion on M&A, all very effectively.

Q: Are there other regions or industries that you are expecting to see strong demand for your services from, beyond areas you’ve touched on already, like the Permian Basin and the Gulf Coast?

A: Mexico is the other area that we see a strong demand, especially related to our large Nueva Era pipeline. We are a JV partner with Grupo Clisa out of Monterrey, and we’ve basically contracted all the capacity for that pipeline. We built the pipeline to supply natural gas to power plants in Monterrey, since it's one of the largest- growing cities in Mexico. There is currently a lot of near-shoring and industry going to that area. Frankly, in this area they are out of industrial warehouse space for new companies, so there is this large build-out of over 9 million square feet of warehouses as well as a lot of natural gas needs. 

We feel fortunate that we built that project in 2018, and we are getting a lot of interest in interconnecting with our pipeline and expansion opportunities within the region. We also see expansion in the South Texas region, specifically the Delaware Basin.  And we are busy in Pennsylvania, within our Marcellus assets. It's been neat to see our assets evolve over time, and our job continues to ensure we are out there increasing awareness of our company and capabilities with new customers. The volume of potential projects is pretty high right now and my engineering team is extremely busy, which is how we like to be.

Q: What are the key challenges you are facing in project development?

With the development of projects, we have a great group that can move quickly on scoping and pricing and then support our corporate development group, running models, looking at returns and determining which projects we want to spend our time on. Post-COVID, people just aren't carrying inventory like they used to. When you think about large vessels, I&E equipment, purchased power components like transformers – to be able to maintain the same installation window, we have to get ahead of the curve from a procurement standpoint.  

In 2023, we were able to build that cryogenic plant within a nine-month timeframe. But the only reason we installed it in nine months is we started procurement probably seven months in advance of breaking ground. Large, 5,000-horsepower motors, transformers, MCC equipment – we had to identify what those items were, and fortunately, had the support of our board and our partners to go out and spend millions of dollars on the front end to keep us on schedule. Inventory and procurement are an ongoing challenge. It is our job to keep a good pulse on what those timelines are, understand existing supply chain interruptions, and ultimately bring awareness and drive solutions to be able to have a competitive installation window on the back end.

Q: How much of a constraint are workforce shortages likely to be and what can be done to address this?

A: I can answer that in two parts. Internally, we are constantly looking at our environment and adjusting. We have really built up a strong HR team that – from a talent acquisition standpoint – can support our other departments. We are highly creative at getting out and introducing the company to harness that talent. We have a good resource profile to scale, and we know what we are looking for when recruiting for our company. 

From an external standpoint, as far as the workforce and people being able to perform at a top tier level goes, that's certainly a challenge. Going back to our partnership philosophy, we are constantly spending time interacting with our contractors and our procurement providers.  When we meet a new contractor that we think has potential and can benefit us long-term, we will find an opportunity, probably more so on a smaller scale, to try them out and start building trust. But at any given time, we want to make sure that our recruiting efforts for internal employees are strong and that we're spending a lot of time looking at performance and ensuring that we have numerous contractors that meet our criteria to execute

Q: Beyond what you’ve already touched on, what else can be done to keep construction costs under control in the fact of material cost inflation and supply chain challenges?

A: Costs reflect how well we have scoped the project and contracted the project. We have a fabulous team that does a great job of understanding what the scope is, and meet our contractors halfway, ensuring that the contract and the pricing are all in place and we have good visibility. From an ownership standpoint, there are no contracts signed in our company without the project leads coming in and sitting down with myself and our CEO, Mike Howard. We want to make sure that everyone's comfortable with the timeline, the cost, and the communication process. 

Since we spend time and energy developing relationships and have in-house personnel that are paying close attention to every detail, we know it is going to yield a successful project. When companies start being too bureaucratic and take things for granted, by just contracting out to have more bodies on the ground, but are not intentional, that's when problems can arise. 

Q: How do you navigate regulatory uncertainty and what would you want from the new administration in the US in order to help the midstream sector?

A: We have a team, from a compliance standpoint and they do a phenomenal job interacting with local, state and federal regulatory bodies, with the goal to form partnerships. We want to be involved in and participate in the development of new regulations. We want to be involved and build relationships with regulators, whether it is for auditing or procedures, anything we can do to ultimately drive common sense approaches to regulatory provisions and the rollout of those policies is helpful for the industry. We want to have a seat at the table, and I think to get a seat at the table, you need to be a prudent operator. You need to let them know that you can be a trusted partner.

Our KPIs and statistics need to reflect that. Whether you're looking at our safety stats, whether you're looking at our audits or our performance in every geographic area we operate in, it’s easy to see that we perform at a very high level.  Through building relationships, we can translate our thoughts and be more effective in giving advice or driving policies. We're not a large company, but we want to allocate the appropriate amount of time to be a partner with regulators and drive responsible rulemaking that benefits everybody.

Q: What is your outlook for the future and what do you want from the industry as you look ahead?

A: From an industry standpoint, we just want to play our part. As you look at industry flourishing and human flourishing, we know energy plays a part in everyday life. We are extremely proud of not only the company that we've developed but of our ability to contribute to our energy platform. We spend a lot of time on energy education, to ensure that we are providing facts on our industry for our employees and anyone from an external standpoint that's interacting with us. I think the future needs a combination of all kinds of energy. We need solar and we need wind, but fossil fuels are going to play a major part when you think about that mix going forward. We are a company that's highly diverse. We have a large natural gas sector, and we will continue to see demand increasing. 

From a business development outlook, I get pretty excited when I think about the strong platform that we have today and the deep ditch that we have to be able to scale. We are going to be larger in size and more vertically integrated as far as our projects and the supply chain associated with it go. My job is to make sure that whether it is a big or small acquisition, our systems, our platforms and our people are ready to take it on. And I'm highly confident at this point that Howard Energy – from a professional standpoint and a maturity standpoint – is ready to scale accordingly.