MarkWest Utica EMG LLC, a joint venture of MarkWest Energy Partners LP and The Energy & Minerals Group, and Ohio Gathering Co. LLC, a joint venture of MarkWest Utica EMG and Summit Midstream Partners LLC, have agreed to provide natural gas gathering, processing, and fractionation services in the Utica shale in Ohio to American Energy–Utica LLC (AEU).
MarkWest Utica will provide gas processing services at its Cadiz complex in Harrison County, Ohio, and its Seneca complex in Noble County, Ohio, both of which currently provide 725 MMcfd of total processing capacity to eight Utica producers. The two complexes will be expanded to more than 1.3 bcfd of processing capacity by second-quarter 2015 (OGJ Online, Aug. 7, 2014).
MarkWest Utica will fractionate AEU’s NGLs at its jointly owned Hopedale complex, which currently includes 60,000 b/d of propane and heavier NGLs fractionation capacity and will be expanded to 120,000 b/d of capacity by next year’s first quarter. MarkWest Utica will utilize its 40,000 b/d de-ethanization facility at the Cadiz complex to produce purity ethane on behalf of AEU for delivery to the ATEX pipeline.
Ohio Gathering will provide natural gas gathering and compression services for all of AEU’s gas produced from the dedicated area. Ohio Gathering’s system currently consists of hundreds of miles of low- and high-pressure pipelines and numerous compression facilities throughout southeastern Ohio, including Harrison, Guernsey, Belmont, Noble, and Monroe counties.
AEU has acquired a significant acreage position in the Utica, most recently purchasing 27,000 net acres in Monroe County in Ohio from East Resources and an unnamed private company (OGJ Online, June 9, 2014). With the agreements, the company has dedicated more than 60,000 net acres in the rich-gas and condensate windows to MarkWest Utica and Ohio Gathering.
MarkWest Utica and Ohio Gathering have existing long-term, fee-based gathering and or processing and fractionation agreements with the majority of producers operating in the southern core area of the Utica, including Antero Resources Corp., Gulfport Energy Corp., Rex Energy Corp., PDC Energy Inc., and others.