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Range Growing Marcellus Processing Capacity

Range Resources Corp.'s gas processing capacity in southwestern Pennsylvania has been expanded to 60 MMcf/d with the completion of a 30 MMcf/d cryogenic processing plant as part of the second phase of its infrastructure development in the Marcellus Shale play of Appalachia.

In 2008 Range contracted with MarkWest Energy Partners LP to develop processing and pipeline capacity (see NGI, July 21, 2008). In October the first phase was completed, which included a 30 MMcf/d refrigeration gas processing plant, three compressor stations and approximately 25 miles of pipelines. The second phase includes the cryogenic plant along with three additional compressor stations and 20 additional miles of gathering and pipelines.

The cryogenic plant is undergoing initial start-up. Once that is completed in the coming weeks, the plan is to divert natural gas flowing to the refrigeration plant to the cryogenic plant. The objective is to fill the cryogenic plant as soon as practical, since the cryogenic plant is capable of extracting a larger portion of natural gas liquids from the high-Btu Marcellus gas.

Once the cryogenic plant is fully loaded, the next step will be to turn on previously drilled Marcellus wells to the expanded pipeline system. As additional production is added, such production will then be processed through the refrigeration plant. Range said it will be tying in new wells and anticipates the refrigeration and cryogenic plants reaching full processing capacity during the third quarter. Range currently has 15 Marcellus wells in various stages of completion, waiting to be turned to production.

The third phase of the infrastructure buildout will be to add 20 MMcf/d of refrigeration capacity by the end of September, which will increase total processing capacity to 80 MMcf/d. Also in the works is construction of a 120 MMcf/d cryogenic facility expected to be fully operational in January. Simultaneously, additional compression and pipelines are being added as Range continues to drill new Marcellus wells throughout 2009, the company said.

By the end of 2008 Range had doubled its Marcellus Shale leasehold to 900,000 net acres and more recently has been focused on growing production. In February CEO John Pinkerton said the company expects to build its Marcellus gas output to increase to as much as 100 MMcf/d by the end of 2009 (see NGI, March 2).

"While still early in the development phase of the play, we are encouraged with the progress being made by our team," Pinkerton said last Wednesday. "The infrastructure expansion is on schedule, we continue to drill high-quality wells, to optimize the cost of drilling and completing wells and our production is increasing. Most importantly, this keeps us solidly on track to exit 2009 at our Marcellus production target of 80 to 100 MMcfe/d net. With the completion of the cryogenic plant at the end of this year, we will be well positioned to continue to grow our Marcellus production in 2010."

Earlier this year MarkWest and NGP Midstream & Resources LP said they would construct and operate midstream services in the Marcellus play (see NGI, Feb. 2).

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