A natural gas gathering system with initial capacity of 500 MMcf/d is being developed to service XTO Energy Inc.'s operations in southeastern Ohio, Summit Midstream Partners LLC said Monday.
The $400 million system, to be built over several years, would be owned and developed by Summit Midstream Utica LLC. The system is designed to transport gas for the ExxonMobil Corp. subsidiary from Belmont and Monroe counties, with service scheduled to begin in the second half of 2015. XTO, as the anchor shipper, plans to dedicate 29,000 acres under a long-term agreement.
The latest transaction "represents a significant step for the Summit enterprise," said Summit Investments CEO Steve Newby. "This development for XTO establishes Summit's operating presence in the Utica Shale play. Additionally, this transaction increases Summit Investments' development backlog to more than $2 billion and complements an existing 40% interest in an Ohio gathering joint venture with MarkWest Utica EMG" (see Shale Daily, June 4).
Summit management plans to execute additional gathering agreements with other large acreage holders in the area over the next several months, Newby added.
The XTO system is to consist of 115 miles of pipeline with four compressor stations and with initial capacity of 500 MMcf/d. It would gather, compress and deliver the gas into downstream delivery points, which include the 2.1 Bcf/d high-pressure Utica Ohio River Trunkline project now under construction by Regency Energy Partners LP and American Energy Partners LP affiliate American Energy-Midstream LLC (see Shale Daily, Aug. 7).
At the beginning of this year XTO had about 82,000 net acres in Ohio, but in February it agreed to sell interests in about 30,000 net acres to American Energy-Utica LLC to help fund Utica development (see Shale Daily, Feb. 3). XTO continues to operate in a core area of about 52,000 net acres of the state, optimizing development with the proceeds to fund all of the near-term development costs. Most of XTO's Appalachian leasehold is in Pennsylvania, where it maintains more than 500,000 net acres.