R.E. Gas Development LLC and Stonehenge Appalachia LLC entered an agreement under which Stonehenge will construct a natural gas gathering and compression system in Pennsylvania, Rex Energy Corp. (REXX) and Stonehenge Energy Resources II said May 19. R.E. Gas is an affiliate of Rex, and Stonehenge Appalachia is an affiliate of Stonehenge Energy Resources II.

The gathering and compression system will transport natural gas production from the Moraine East area in Butler County.

Stonehenge will build the system this year. Drilling began in the Moraine East area during the first quarter of this year. The initial part of the system will feature a 20-mile trunk line, various gathering lines and a compressor station. Initial capacity of 400 million cubic feet per day could also be expanded to facilitate future development and growth in the Moraine East area.

The Stonehenge system will deliver gas to the Bluestone processing plant owned and operated by a subsidiary of MarkWest Energy Partners LP.

“This agreement is a critical component of our development strategy for the Moraine East area, and we are excited to once again be partnering with Stonehenge for these essential services,” said Tom Stabley, CEO of Rex. “The initial gathering system will provide ample capacity for our 2015 and 2016 development program, and the potential for expansion provides us with greater flexibility to support our future growth in the Moraine East area.”

“This project allows Stonehenge to return to Butler County, again in support of the dominant producer in the area, Rex Energy. Work on the new midstream system is well underway, and we are focused on meeting the substantial production needs in this and subsequent years,” said Chuck Wilkinson, president of Stonehenge.

State College, Pa.-based Rex Energy Corp. operates in the Appalachian and Illinois basins.