MarkWest Energy Partners LP and the Energy & Minerals Group (EMG) agreed to develop a large-scale dry gas gathering system to expand Utica midstream operations, and the new gathering system was expected to be operational by Dec. 31.
Terms called for the system to be underpinned by a long-term, fee-based contract with Ascent Resources-Utica LLC, a subsidiary of Ascent Resources LLC.
Frank Semple, MarkWest chairman, president, and chief executive officer, anticipated an investment of about $1 billion into the new gathering system during 3 years. The system will be developed and financed under a joint venture between MarkWest and EMG.
"The Utica shale includes some of the most productive and economic dry gas acreage," Semple said, adding the new gathering system targets "the most economic area of the Utica dry gas play."
The joint venture was to be two-thirds owned by the partnership and one-third by EMG. At the time the Utica midstream system was announced, MarkWest was being acquired by the pipeline division of Marathon Petroleum Corp.
Ascent is an Appalachian exploration and production company with 280,000 net acres in the Utica and Marcellus shale plays. Terms called for Ascent to dedicate 100,000 gross acres in northern Belmont and Jefferson counties, Ohio.
Dry gas production from Ascent's acreage was expected to support the system's initial growth, and the system also was expected to gather dry gas volumes from other producers, Markwest said in an Aug. 13 news release.
The system was to be designed to gather more than 2 bcfd from Utica's dry gas window, and it could ultimately consist of more than 250 miles of pipeline and more than 200,000 hp of compression.
Numerous takeaway options include connections to the Ohio River System, a gathering trunkline project capable of delivering gas to Rockies Express Pipeline, Texas Eastern Transmission, ET Rover Pipeline, and other interstate pipelines.
MarkWest and EMG, together with Summit Midstream Partners LLC, operate a gathering system in the Utica through the Ohio Gathering Co. LLC joint venture.
Ohio Gathering involves hundreds of miles of low- and high-pressure pipelines and numerous compression facilities throughout southeastern Ohio, including Harrison, Guernsey, Belmont, Noble, and Monroe counties.
As of press time, MarkWest was in the process of becoming a subsidiary of MPLX (UOGR, July/August 2015, p. 30).
The combination, after closing, was expected to create one of the nation's largest master limited partnerships.