Utica, Marcellus prompt more Gulf Coast NGL capacity

Production in the Utica and Marcellus shales is prompting more NGL handling and fractionation capacity on the Texas Gulf Coast.

Kinder Morgan Energy Partners LP and Targa Resources Partners LP announced they will form a joint venture to build new NGL fractionation at Mont Belvieu, Tex., to serve producers in the Utica and Marcellus shales in Ohio, West Virginia, and Pennsylvania.

The announcement said that, to allow producers and shippers time to assess their Gulf Coast fractionation and pipeline needs, Kinder Morgan and Targa are extending until Feb. 28, 2014, a binding open season already under way for the Utica Marcellus Texas Pipeline (UMTP), a proposed joint venture between MarkWest Utica EMG LLC and Kinder Morgan.

Pending approval by the US Federal Energy Regulatory Commission, UMTP will involve abandonment and conversion to liquid service of more than 1,000 miles of Kinder Morgan's existing Tennessee Gas Pipeline natural gas system from Mercer, Pa., to Natchitoches, La., and construction of about 200 miles of new pipeline from Natchitoches to Mont Belvieu.

The new fractionation will sit adjacent Targa's existing capacity at Mont Belvieu and provide fractionation for shippers on UMTP of up to 150,000 b/d, and potentially serve up to 400,000 b/d of maximum pipeline capacity.

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