MarkWest, EMG expanding Utica gas-gathering capabilities via new $1 billion project

MarkWest Energy Partners and The Energy & Minerals Group (EMG) late Wednesday announced development of a new $1 billion dry gas gathering system in the Utica Shale, Kallanish reports.

The system will be underpinned by a long-term, fee-based contract with Ascent Resources–Utica, a subsidiary of former Chesapeake Energy CEO And co-founder Aubrey McClendon’s Ascent Resources. The producer has dedicated roughly 100,000 acres in northern Belmont and Jefferson counties, Ohio, to the system.

Dry-gas production from Ascent’s acreage is expected to support the system’s initial growth; however, the new system will also gather dry gas from other producers, according to the partners.

“Our system will be a critical new gathering option, and we anticipate total investment could exceed $1 billion over the next three years,” said Frank Semple, MarkWest CEO.

The system will be designed to gather more than 2 billion cubic feet per day (Bcf/d) of gas from the Utica’s dry-gas window, and could ultimately consist of more than 250 miles of pipeline and more than 200,000 compression horsepower.

Initial operation is expected to begin by the end of 2015 and the system will provide numerous takeaway options, including connections to the Ohio River System, a gathering trunkline project capable of delivering gas to Rockies Express Pipeline (REX), Texas Eastern Transmission through its new OPEN project, Energy Transfer’s Rover Pipeline, and other interstate lines.

Development of the system will occur under a new joint venture between MarkWest and EMG, which will be owned two-thirds by the Denver-based midstreamer and one-third by long-time partner EMG.

Currently, MarkWest and EMG, with Summit Midstream Partners, operate one of the largest gathering systems in the Utica Shale through the Ohio Gathering Co. joint venture.

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Joseph Barone
www.ShaleDirectories.com