Marcellus cryogenic plant starts up in West Virginia

By OGJ editors
HOUSTON, Jan. 26
-- Another Marcellus gas processing plant has been started up near Cameron, W.Va.

Caiman Energy LLC, Dallas, announced it has completed the 120-MMcfd Ft. Beeler Plant 1 and signed a long-term processing agreement with Chesapeake Energy Corp. for production from Marshall and Wetzel counties.

In the same announcement, Caiman said it expects to complete the 200-MMcfd Ft. Beeler Plant II by yearend, bringing the company’s total natural gas processing capacity at Ft. Beeler to 320 MMcfd.

Caiman said it will also explore construction of a third cryogenic plant with a capacity of 200 MMcfd as early as second-quarter 2011. Caiman Energy Pres. and Chief Executive Officer Jack Lafield said, “We expect to have total processing capacity of 520 MMcfd online” by second-half 2012 (OGJ Online, Mar. 11, 2010).

Processing agreements
Caiman noted other recent midstream service agreements with long-term acreage dedications that include contracts with Gastar Exploration Ltd., Stone Energy, Grenadier Energy Partners LLC, and Drilling Appalachian Corp. It also has agreements in place with AB Resources LLC and Chief Oil & Gas LLC, which it said are its initial anchor tenants in the Marcellus. Existing customers also include Trans Energy Inc. and Republic Energy LLC.

The new agreements bring Caiman’s total dedicated acreage in Marcellus rich gas processing in Marshall and Wetzel counties to more than 160,000 acres. Including dedications in lean Marcellus gas in Pennsylvania and West Virginia, Caiman said it now has nearly 500,000 acres of Marcellus acreage dedicated to its midstream operations.

Caiman operates more than 60 miles of high-pressure, large-diameter pipeline in the Marcellus shale and an additional 60 miles of gas gathering lines under construction. Lafield said that by yearend, Caiman expects to have invested more than $400 million for infrastructure in the Marcellus.

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