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EMG Increases Capital Contribution to Utica Midstream Venture

Based on success to date in developing a midstream system in the Utica Shale, The Energy & Minerals Group (EMG) said it plans to spend an additional $450 million for its joint venture (JV) with MarkWest Energy Partners LP.

EMG's total contribution would increase to $950 million in MarkWest Utica EMG LLC (see Shale Daily, Nov. 7, 2012). The liquidity boost, said the partners, allows MarkWest financial flexibility in timing its capital contributions to the JV, but it doesn't modify the partners' interests. An amendment was added to the agreement allowing MarkWest to contribute up to $150 million to the JV on a short-term basis; EMG would provide its additional funding by the end of this month.

"The acceleration of our Utica midstream development is a direct result of the ongoing success of our producer customers' drilling programs," said MarkWest Energy CEO Frank 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."

The partners are developing an integrated system to support development plans of producers that include Antero Resources, Gulfport Energy Corp. and Rex Energy. The system as designed includes low- and high-pressure gas gathering systems, natural gas liquids pipelines and two large-scale processing complexes that would have nearly 800 MMcf/d of processing capacity (see Shale Daily, Jan. 5, 2012).

Together the facilities, expected to be completed in early 2014, would represent the largest fractionation and marketing complex in the Utica Shale, providing 100,000 b/d of C2+ fractionation capacity, the partners said.

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