Marcellus gas plant work continues in Pennsylvania

By OGJ Editors
HOUSTON, Apr. 9 -- In an update to its Marcellus shale activity in the Pennsylvania Appalachia, Range Resources Corp., Fort Worth, on Apr. 8 announced completion and commissioning in progress on a 30-MMcfd cryogenic gas processing plant in Washington County, south of Pittsburgh.

The plant is part of the second phase of infrastructure work based on a 2008 agreement with MarkWest Energy Partners LP that set plans for development of gas processing and pipelines in the area. The companies completed the first phase of those plans in October of last year.

That initial phase included a 30-MMcfd refrigeration gas plant, three compressor stations, and about 25 miles of pipelines. The second phase, subject of yesterday's announcement, adds three compressor stations and 20 miles of gathering and pipelines. The new cryogenic plant brings Range's total processing capacity in southwestern Pennsylvania to 60 MMcfd.

When the second plant starts up in the next few weeks, said the company, Range plans to divert natural gas flowing to the first-phase plant to the second cryogenic plant. The company said it wants to fill the cryogenic plant "as soon as practical" because it can extract a larger portion of natural gas liquids from the high-btu Marcellus gas.

Once the cryogenic plant is fully loaded, Range said, it will begin flowing gas from previously drilled Marcellus wells into the expanded pipeline system. As Range adds more production, it will be processed through the first-phase refrigeration plant. Range said it will be tying in new wells and expects the refrigeration and cryogenic plants to reach full capacity in third-quarter 2009.

The company said it currently has 15 Marcellus wells in various stages of completion, waiting to be turned to production.

Phase 3
A third phase of the project will add 20 MMcfd of refrigeration capacity by the end of September, increasing total processing capacity to 80 MMcfd.

Also in progress is construction of a 120-MMcfd cryogenic plant expected to come online in January 2010. At the same time, Range said, it is adding more compression and pipelines as it continues to drill new Marcellus shale wells throughout the rest of the year.

Range Chairman and CEO John Pinkerton said that, although it is still early in development of the play, the company is "encouraged with the progress being made…. The infrastructure expansion is on schedule; we continue to drill high-quality wells to optimize the cost of drilling and completing wells, and our production is increasing."

This program, he said, "keeps us solidly on track" to end 2009 at the company's "Marcellus production target of 80-100 MMcfd net."

Completion of the cryogenic plant at yearend positions Range to expand Marcellus production in 2010, he said.

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