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Valerus Wins EQT Midstream Contract; Operators Could Take Note

The decision by EQT Corp. to award Valerus Compression Services LLC a contract to build the components for two compression stations in southwestern Pennsylvania could attract interest by other operators, a Valerus executive said Wednesday.

Chris Scheve, vice president of Northeast operations for Houston-based Valerus, told NGI's Shale Daily that the company had already placed orders for the parts to build three of its 3616 systems. The contract with EQT is to provide 15,000 hp of compression.

"Everything we're building is getting larger," Scheve said, adding that the company's 3616 system measures 180 feet in length, four times the length of its 3516 system. "It's amazing the size and progression of the equipment. Everything is getting larger, and we're being asked to get bigger all the time.

"It seems like the 3616 is becoming the preferred package, where two years ago the preferred package was the 3516."

Valerus is building the systems at its facility in Smithfield, PA, in Fayette County, in the heart of the Marcellus and Utica shales. Scheve said the company has 62 employees in the region, "but we have five immediate openings because of this order." The components should be completed by next spring, he added.

Scheve said operators were taking notice of both the EQT order and Valerus' Smithfield facility, which opened two years ago. Before Smithfield opened, the company built its systems at a facility outside Bay City, TX, then ship the components by truck. He said eight trucks would be needed to ship a 3516 system from Texas; a 3616 system would require 18 trucks.

"You're talking about $250,000 in freight, just to get the unit from Texas, so operators are very interested in this development and about us packaging them [in Smithfield]," Scheve said. Asked if Valerus had any additional orders on the horizon, he said, "we have several [orders] pending, and we expect confirmation shortly. This is pretty significant news, and we'll add more jobs when those orders come in."

It was unclear precisely where EQT planned to deploy the compressor stations. The Pittsburgh-based company said only that they would be placed in southwestern Pennsylvania.

Last month, EQT reported that oil and natural gas production during 3Q2013 had increased 42% from 3Q2012. Production said Marcellus sales volumes averaged 787 MMcfe/d (see Shale Daily,Oct. 24).

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