PVR buys Chief Gathering, Marcellus gas trunkline project
Penn Virginia Resource Partners LP has signed a definitive agreement to acquire Chief Gathering LLC for $1 billion.
Penn Virginia Resource Partners LP has signed a definitive agreement to acquire Chief Gathering LLC for $1 billion. Chief Gathering, owned by Chief E&D Holdings LP, is a midstream pipeline company with operating natural gas transportation assets in the northeastern Pennsylvania portion of the Marcellus shale.
Chief Gathering’s assets include six natural gas gathering systems serving more than 300,000 acres in Bradford, Lycoming, Sullivan, Susquehanna, Wyoming, and Greene counties in Pennsylvania and Preston County, W.Va. Chief Gathering also is building a 750-MMcfd trunkline, expected to enter service in this year’s third quarter, from northern Wyoming County to Luzerne County with a connection to Transco's interstate pipeline. PVR currently owns two gathering systems in Lycoming and Wyoming counties, with a third system in early stage development in Susquehanna County.
All of the gathering, compression, and dehydration services for the Chief Gathering systems are provided under fee-based agreements with active Marcellus producers including Chesapeake, Anadarko, Statoil, Mitsui, EXCO/BG Group, ExxonMobil/XTO, Chief, Enerplus, and Chevron. As of February, volumes on the Chief Gathering systems were 235 MMcfd and volumes on PVR's Marcellus systems were 210 MMcfd, according to PVR. The Wyoming County trunkline has 15-year firm transportation volume commitments of 255 MMcfd for 2012, increasing to 355 MMcfd in 2013.
PVR plans to finance its purchase through a combination of committed equity and debt and expects it to close in the second quarter, subject to regulatory clearances and other customary closing conditions.
Penn Virginia last year bought a natural gas gathering system and processing plant in the Texas Panhandle portion of the Granite Wash play (OGJ Online, June 10, 2011).
Contact Christopher E. Smith at email@example.com.