MarkWest, EMG to develop new dry gas gathering system in Utica shale

MarkWest Energy Partners and The Energy & Minerals Group (EMG) are to develop a new, large-scale dry gas gathering system to strategically expand the parties’ position in the Utica shale.

The system will be underpinned by a long-term, fee-based contract with Ascent Resources – Utica, LLC, a subsidiary of Ascent Resources. Ascent Resources is one of the largest pure-play Appalachian E&P companies with approximately 280,000 net acres in the Utica and Marcellus shale plays.

As part of the agreement, Ascent has dedicated to the parties approximately 100,000 gross acres in northern Belmont and Jefferson counties, Ohio. Growing dry gas production from Ascent’s acreage is expected to support the system’s initial growth; however, the new system will also gather significant dry gas volumes from other producers.

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

The system will be designed to gather more than 2 Bcfgd from this portion of the Utica’s dry gas window, and could ultimately consist of more than 250 miles of pipeline and more than 200,000 horsepower of compression.

Initial operation is expected to begin by the end of 2015, and the system will provide numerous takeaway options. Development of the system will occur under a new joint venture between MarkWest and EMG, which will be owned two-thirds by MarkWest and one-third by EMG.

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