Deals - Joint Ventures | Capital Markets | Private Equity Activity
American Energy Partners Taps MarkWest JV for for Utica Midstream Ops
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MarkWest Utica EMG, L.L.C., a joint venture between MarkWest Energy Partners, L.P. and The Energy & Minerals Group, and Ohio Gathering Company, L.L.C., a joint venture between MarkWest Utica EMG and Summit Midstream Partners, LLC, today 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 announced today, 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 at its jointly owned Hopedale complex, which currently includes 60,000 barrels per day 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 Corporation (AR), Gulfport Energy Corporation (GPOR), Rex Energy Corporation (REXX), PDC Energy, Inc. (PDCE), and others.
Frank Semple, Chairman, President, and Chief Executive Officer of MarkWest, commented: "The Utica is one of the fastest growing shale plays in the U.S. and we are excited to support American Energy as they are quickly establishing a significant presence in this premier resource play. Just over two and a half years ago, MarkWest and EMG began developing the most comprehensive and fully integrated midstream system in southeastern Ohio, and, together with Summit, we continue to build critical assets to support our producer customers’ drilling programs for decades to come."