MarkWest Utica EMG LLC, a joint venture between MarkWest Energy Partners LP (NYSE: MWE) and The Energy & Minerals Group; and Ohio Gathering Co. LLC, a joint venture between MarkWest Utica EMG and Summit Midstream Partners LLC, have announced the completion of definitive agreements with American Energy – Utica LLC, an affiliate of American Energy Partners LP, to provide natural gas gathering, processing, and fractionation services in the Utica Shale in Ohio.
AEU has acquired a significant acreage position in highly prolific Utica Shale and with the agreements, has dedicated more than 60,000 net acres in the rich-gas and condensate windows to MarkWest Utica EMG and Ohio Gathering.
Under the terms of the agreements, MarkWest Utica EMG will provide natural gas processing services at its Cadiz complex in Harrison County, Ohio and its Seneca complex in Noble County, Ohio. Combined, these two large complexes currently provide 725 million cubic feet per day of total processing capacity to eight key producer customers in the Utica Shale. Based on previous announcements, the two complexes will be expanded to more than 1.3 billion cubic feet per day of processing capacity by the second quarter of 2015.
MarkWest Utica EMG will fractionate AEU’s natural gas liquids (NGLs) at its jointly owned Hopedale complex, which currently includes 60,000 barrels per day (“Bbl/d”) of propane and heavier NGLs fractionation capacity and will be expanded to 120,000 Bbl/d of capacity by the first quarter of 2015. MarkWest Utica EMG will utilize its 40,000 Bbl/d de-ethanization facility at the Cadiz complex to produce purity ethane on behalf of AEU for delivery to the ATEX pipeline.
Ohio Gathering will provide natural gas gathering and compression services for all of AEU’s gas produced from the dedicated area. Ohio Gathering’s system currently consists of hundreds of miles of low- and high-pressure pipelines and numerous compression facilities throughout southeastern Ohio, including Harrison, Guernsey, Belmont, Noble and Monroe counties.
In addition to AEU, MarkWest Utica EMG and Ohio Gathering have existing long-term, fee-based gathering and or processing and fractionation agreements with the majority of producers operating in the southern core area of the Utica Shale, including Antero Resources Corp. (NYSE: AR), Gulfport Energy Corporation (Nasdaq: GPOR), Rex Energy Corp. (Nasdaq: REXX), PDC Energy, Inc. (Nasdaq: PDCE), and others.
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