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PVR's Marcellus Gathering System Growing

Penn Virginia Resource Partners LP (PVR) said Monday that total throughput on its Eastern Midstream Segment in Northeast Pennsylvania averaged more than 1.8 Bcf/d, with a total of 101 well connections completed last year as the company's customer base continues to grow in the Marcellus Shale play.

Last month's increase in throughput on its eastern segment -- a network of 356 miles of gathering and mainline pipelines serving 15 producers -- represented a 60% increase over the total volume of 1.1 Bcf/d that the company reported in December 2012.

"Volumes showed strong growth during the fourth quarter, and December volumes exceeded the high end of our expectations for total year-end gathering and trunkline throughput," CEO Bill Shea said in a statement. "Total direct well connections during 2013 materially exceeded our initial forecast of 91 connects for the full year."

PVR began commercial operations on its first large-diameter gathering line in the north-central Pennsylvania Marcellus fairway in 2011 by providing 850 MMcf/d of capacity that connects to Transcontinental Gas Pipeline Co. LLC's (Transco) interstate system (see Shale Daily, Feb. 18, 2011). A subsidiary of Range Resources Corp. contracted for significant capacity on that line, and the company announced plans to move forward with more pipelines and related facilities that year after entering the Marcellus in 2010.

That year, total throughput volumes were just 25 MMcf/d on the system, and PVR completed only three well connections by the end of its first year in the play. But as production has soared in the Marcellus (see Shale Daily, Dec. 9, 2013), the company continues to grow its footprint, announcing on Monday that it had entered into another agreement to provide transportation and related services to a major Marcellus producer.

Under the terms of the agreement, PVR will construct a new interconnection into its facilities and the unspecified producer has committed 50 MMcf/d of firm transport on PVR's 24" Wyoming Trunkline.

Shipments are expected to start after the new interconnection is complete sometime during the fourth quarter. Additionally, PVR said other current Marcellus area shippers have increased their transportation commitments on its trunklines.

Since 2010, PVR's eastern segment has grown to include gathering operations in a dry gas production area encompassing Tioga, Lycoming, Wyoming, Sullivan and Bradford counties. The system provides market outlets on both Transco and the Tennessee Gas Pipeline.

In October, Regency Energy Partners LP said it would acquire PVR in a $5.6 billion deal expected to close this quarter (see Shale Daily, Oct. 11, 2013). PVR's assets in the Appalachian Basin and the Midcontinent are expected to significantly boost Regency's holdings.

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