MarkWest Energy Partners LP has executed two long-term fee-based agreements allowing it to expand its Marcellus gas processing capacity and install significant gathering facilities to accommodate increasing rich gas production in West Virginia.
To support its first agreement, with affiliates of Chesapeake Energy Corp., MarkWest will expand its gas processing capacity in Majorsville, W.Va., to approximately 1.1 Bcf/d from its current 670 MMcf/d. The company will construct two new 200-MMcf/d cryogenic gas plants, expected to be completed in late 2013 and mid-2014. In exchange, Chesapeake will dedicate "significant acreage" to the Majorsville processing complex, according to a May 4 statement.
This expansion will increase MarkWest's total processing capacity in the rich gas area of the Marcellus to more than 2.1 Bcf/d, effectively all of which is supported by long-term agreements with producer customers, the company said.
The second agreement, with Exxon Mobil Corp. subsidiary Antero Resources Appalachian, will expand MarkWest's existing gathering operations in southwestern Pennsylvania into West Virginia and includes the installation of two large high-pressure gathering headers and associated compressor stations in Doddridge and Harrison counties in West Virginia. It will have the capacity to initially deliver more than 300 MMcf/d of Antero's rich gas to the Sherwood processing complex.
MarkWest said the expansion's first phase, which will be completed in the third quarter of 2012, will be finished in conjunction with the 200-MMcf/d Sherwood I processing facility, while the 200-MMcf/d Sherwood II processing facility is expected to come online in the second quarter of 2013.
The company said both projects were included in MarkWest's previously announced 2012 capital investment estimates.
"We are excited to expand our existing relationships with Chesapeake and Antero," said MarkWest Chairman, President and CEO Frank Semple. "MarkWest continues to focus on providing best of class fully integrated midstream services that are critical to the rich-gas development in the northeast United States and we are pleased to further strengthen our leading midstream presence in the liquids-rich area of the Marcellus."
Copyright 2012 SNL Financial LC. All Rights Reserved.
(Originally published May 7, 2012, in SNL Daily Gas Report.)