Chesapeake group plans Utica NGL project
Chesapeake Midstream Development LP, M3 Midstream LLC, and EV Energy Partners LP have formed a partnership to build a midstream services complex with capacity to process 600 MMcfd of natural gas for the Utica shale play in eastern Ohio (OGJ Online, Feb. 29, 2012).
The project joins other midstream ventures recently announced in conjunction with rapid development of the liquids-rich gas resource (OGJ Online, Mar. 7, 2012).
Under new definitive agreements, Chesapeake will build and operate natural gas gathering and compression facilities, and M3 Midstream will build and operate processing, NGL fractionation, loading, and terminal equipment.
The cryogenic processing plant will be in Columbiana County, southwest of Youngstown.
NGLs will move from there south to a central NGL hub in adjacent Harrison County with initial storage capacity of 870,000 bbl, fractionation capacity of 90,000 b/d, and a rail-loading facility. Gas processing and fractionation are to start in second-quarter 2013.
Chesapeake Energy Corp. said the partnership plans to invest $900 million over 5 years, most of it in the first 2 years. Chesapeake Midstream affiliates own 59% of the group, M3 Midstream 33%, and EV Energy Partners 8%.
Total E&P USA Inc., a 25% partner with Chesapeake in Utica shale wet gas acreage, has an option to participate in the midstream project (OGJ Online, Jan. 3, 2012). Exercise of the option would lower Chesapeake’s interest to 44% and EV Energy’s to 6%.
Bob Tippee | Editor
Bob Tippee has been chief editor of Oil & Gas Journal since January 1999 and a member of the Journal staff since October 1977. Before joining the magazine, he worked as a reporter at the Tulsa World and served for four years as an officer in the US Air Force. A native of St. Louis, he holds a degree in journalism from the University of Tulsa.
