Blue Racer signs midstream agreements; Natrium II done in March

Blue Racer Midstream LLC, a joint venture of Dominion Resources and Caiman Energy II LLC, entered into long-term agreements with Utica shale natural gas producers to provide comprehensive, integrated midstream services from liquids-rich acreage in Monroe, Noble, Guernsey, Belmont, Harrison, and Carroll counties, Ohio.

Producers party to the new agreements include Eclipse Resources I LP, Hess Corp., Consol Energy Inc., and PDC Energy Inc. Services provided by Blue Racer will include natural gas gathering, compression, treating, processing, and transportation; condensate handling; and fractionation, storage, transportation, and marketing of natural gas liquids.

Blue Racer says it will commission Natrium II, a 200-MMcfd expansion to its Natrium natural gas processing site in Marshall County, W.Va., in early March. The expansion brings overall nameplate processing capacity at the Natrium complex to 400 MMcfd. In addition to the Natrium expansions, Blue Racer is building its Berne processing complex in Monroe County, Ohio. Berne will use three 200-MMcfd cryogenic processing units. Blue Racer expects to commission the first 200-MMcfd processing unit at Berne by the end of the third quarter. Once operating at full capacities, the Natrium and Berne sites will be able to process 1 bcfd of natural gas.

Current fractionation capacity at Natrium is 46,000 b/d, enough for the processing expansions at Natrium and the first 200 MMcfd of processing at Berne. Blue Racer will expand fractionation capacity at Natrium to 126,000 b/d by March 2015, providing increased ethane recovery and accommodating additional processing capacity at Berne.

A 30-mile, Y-grade pipeline will carry processed liquids from the Berne complex to Natrium for fractionation. NGL are currently transported from Natrium to downstream markets via rail, truck, and pipeline. Blue Racing is also developing barging via the Ohio River, which the company says will make Natrium the only fractionation site to offer barge service to Utica producers.

Blue Racer’s ethane pipeline provides direct access to the Enterprise Products Partners’ ATEX Pipeline (OGJ Online, Dec. 6, 2013). Additional pipelines out of Natrium will connect to Sunoco’s Mariner East and Mariner West pipelines and EPP’s TEPPCO Pipeline. Blue Racer is pursuing interconnects to other long-haul NGL pipelines awaiting approval.

In addition to existing natural gas pipeline interconnections with Dominion Transmission Inc. and Dominion East Ohio, Blue Racer is establishing interconnections with Texas Eastern Transmission and has approved establishing an interconnection with Rockies Express Pipeline.

Blue Racer’s network of nearly 600 miles of large-diameter gathering pipelines spans 24 counties in Ohio and West Virginia and can gather more than 1.5 bcfd of natural gas. The company in October purchased a 45-mile, 24-in. OD pipeline from Dominion Transmission Inc. that fully interconnected Blue Racer’s gathering systems to its Berne processing site. Blue Racer says it continues to expand its gathering system to meet producer demand. Eclipse, for instance, owns 95,000 net Utica acres and plans to double its rig count to six during 2014.

Blue Racer already had midstream agreements in place with other Utica producers, including Chesapeake Energy Corp., Total Gas & Power North America Inc., Rex Energy Corp., and EnerVest.

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