Tailwater Capital LLC has announced a strategic investment in Pickton Gas Storage LLC, a natural gas infrastructure platform led by the former management team of NorTex Midstream Partners. This capital deployment coincides with Pickton reaching a Final Investment Decision (FID) on a new natural gas storage facility and a dedicated transportation and trading hub in East Texas. To support this development, the company has also closed a new project finance debt facility. The project aims to transform a depleted reservoir into a high-deliverability storage field, addressing the rising demand for energy reliability and market flexibility within the Texas and Gulf Coast regions.
Tailwater Capital Investment and Pickton FID
Tailwater Capital is executing this investment through its latest flagship infrastructure fund, Tailwater Fund V, alongside a direct co-investment vehicle. The Pickton management team, led by CEO John Holcomb, previously operated NorTex, which served the Dallas-Fort Worth Metroplex and improved North Texas power grid reliability through direct gas supply agreements to major power plants. The underlying reservoir and related infrastructure assets were contributed to Pickton by Sulphur River Gathering LLC (SRG), which will continue to collaborate with the Pickton team during the construction and commercialization phases.
The project's financial structure is supported by a newly closed construction term loan provided by a consortium of financial institutions. Investec Inc. is serving as the Lead Arranger, Sole Bookrunner, and Administrative Agent. Deutsche Bank AG and Starwood Infrastructure Finance, LLC are acting as Coordinated Lead Arrangers, while BankUnited, N.A. serves as the Depository Agent. Additional lenders in the consortium include BankUnited, N.A. and BOK Financial. This financing facilitates the redevelopment of the reservoir into a modern storage field with 35 billion cubic feet of working gas capacity. The initial phase of the project is already fully contracted, with commercial operations expected to commence in the Spring of 2028.
Paris Hub Development and Texas Market Demand
The Pickton development includes the construction of the Paris Hub, a new natural gas trading and transportation hub located in Paris, Texas. This infrastructure will feature bi-directional interconnects with five large-diameter intrastate and interstate pipelines. By establishing these connections, the Paris Hub is positioned to create a liquid gas market situated between major supply basins and the growing demand centers across Texas and the broader Gulf Coast region. This strategic location is intended to capture regional market tailwinds driven by industrial activity and power generation.
The project addresses significant growth in Texas natural gas demand, which is currently being propelled by economic expansion and increased power generation requirements. According to Tailwater Managing Director Scott Peters, storage infrastructure is essential for balancing supply and demand, supporting grid reliability, and providing necessary market flexibility. The Pickton facility will repurpose a depleted hydrocarbon reservoir into a high-deliverability, multi-cycle storage asset. This redevelopment is designed to serve the specific needs of the Texas energy landscape, where the intersection of supply basins and demand centers requires robust, high-capacity midstream infrastructure to maintain stability.
Key Takeaways
- Pickton Gas Storage has reached a Final Investment Decision (FID) to develop a 35 billion cubic feet working gas capacity storage field in East Texas.
- The project includes the construction of the Paris Hub, which will feature bi-directional interconnects with five large-diameter intrastate and interstate pipelines.
- Commercial operations for the initial phase of the project are scheduled to begin in the Spring of 2028.
EnergyInsyte's Take
In our view, Tailwater Capital’s investment in Pickton signals a sophisticated approach to capturing value within the Texas midstream sector by focusing on "recycled" assets. By converting a depleted reservoir into a high-deliverability storage field, Pickton is addressing a critical infrastructure gap: the need for localized, high-capacity balancing tools to support a rapidly expanding power grid and industrial base. The decision to integrate the Paris Hub with five major pipeline interconnects is particularly strategic, as it transforms a simple storage play into a multi-functional liquidity center. This move suggests that the most effective way to manage Texas's volatile demand-supply dynamics is through integrated assets that combine storage with active trading and transportation capabilities. For investors and grid operators, this project represents a targeted response to the structural necessity of midstream flexibility in a high-growth energy market.
Source : Cision PR Newswire
