MarkWest to spend $1.9B for processing, piping

February 22, 2013
Shale Play


Shale Play

CADIZ, Ohio - A new agreement will allow natural gas processor and transporter MarkWest Energy to "rapidly expand" its presence in Ohio's Utica Shale field, as the company looks to spend up to $1.9 billion in the region this year.

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One MarkWest facility already is operating near Cadiz, and the plant will soon increase its capacity to separate dry methane from liquid ethane, propane, butane and pentane. The company is now building a fractionator - a machine that will further process those materials into marketable items - near Hopedale, which will connect to the Cadiz plant via pipeline.

MarkWest also is building a network of pipelines throughout eastern Ohio, including some in the Flushing area of Belmont County. The company processes gas for producers such as Gulfport Energy and Antero Resources, both of which are active drillers in the area.

MarkWest also processes gas in West Virginia at the Mobley site in Wetzel County and the Majorsville complex in Marshall County, working for producers such as Magnum Hunter, Consol Energy, Noble Energy and Range Resources.

"The acceleration of our Utica midstream development is a direct result of the ongoing success of our producer customers' drilling programs," said Frank Semple, chairman, president and chief executive officer of MarkWest.

According to MarkWest, the Cadiz processing complex will include a de-ethanization facility where ethane will be produced and delivered into the ATEX Express ethane pipeline. This pipeline will transport ethane from the Utica and Marcellus shale regions to the Gulf Coast for cracking.

The propane, butane and other, heavier natural gas liquids will flow via pipeline from Cadiz to the Hopedale fractionator for further separation. Together, these facilities will represent the largest fractionation and marketing complex in the Utica Shale, providing 100,000 barrels per day of fractionation capacity by early next year, MarkWest officials said.

In addition to its Harrison processing complex, MarkWest is developing a second processing complex in Noble County. The Harrison and Noble processing complexes will be connected through a gathering system to the Harrison fractionation complex.

MarkWest is able to complete these projects, in part, because of the new agreement with the Energy & Minerals Group, which is contributing $950 million to the cause. According to company information, the Energy & Minerals Group is a private firm that focuses exclusively on investing in natural resources its members believe are integral to the global economy.

"We are thrilled to once again leverage our relationship with MarkWest to help meet their liquidity needs with a large scale flexible solution that ... meets the needs of the producer community for additional capacity given the drilling results experienced to date in the Utica," said John Raymond, managing partner and chief executive officer of EMG.

As an example of this, the Gulfport Stutzman well south of Barnesville could be yielding as much as $100,000 of revenue per day, based on its current production levels.

"We are pleased to announce the continued development of our Utica Shale system and the expansion of our partnership with EMG," added Semple.

"Our long-term relationship with EMG has provided us with the capital flexibility to build ahead of our customers and provide fully integrated natural gas and natural gas liquids services in one of the best resource plays in the U.S."



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