Hess signs PVR to build Utica gas gathering system

Hess Corp. has agreed to terms with PVR Partners LP for the latter to build, own, and operate a 45-mile natural gas trunkline and associated gathering pipelines and equipment serving Hess’s lean gas production in the Utica shale in eastern Ohio. PVR will build a minimum 20-in. OD trunkline with an expected minimum capacity of 450 MMcfd and connections to the Texas Eastern and Rockies Express interstate pipelines, with possible future connections to other interstate systems.

PVR also will build gathering pipelines, compression stations, dehydration units and other related equipment to gather Hess’s production from the dedicated acreage. PVR expects the project to begin operations in late 2014, with additional producers signing on for capacity and gathering services as construction progresses.

In addition to providing committed volumes of gas to the project, PVR’s agreement with Hess establishes an area of mutual interest covering portions of Belmont, Jefferson, and Harrison counties where Hess holds substantial acreage.

PVR expects the project to cost $125-150 million. The company last month sold its part of Thunder Creek Gas Services to Meritage Midstream Services II LLC (OGJ Online, Aug. 20, 2013). Thunder Creek owns and operates gas gathering, treating, and processing assets in Wyoming’s Powder River basin.

Hess said early in the year that it was going to increase its 2013 exploration and production expenditures in the Utica shale to $400 million from $300 million in 2012 (OGJ Online, Jan. 11, 2013).

Contact Christopher E. Smith at chriss@ogjonline.com.

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