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Larger NatGas Gathering System On Track For Central Pennsylvania

After years of planning, Unit Corp. subsidiary Superior Appalachian Pipeline LLC is on track to complete one of central Pennsylvania's larger gathering systems to move Marcellus Shale gas to Dominion Transmission Inc.

The fee-based project consists of just seven miles of 16-inch and 24-inch diameter trunkline and a related compressor station to get gas to Dominion Transmission. Called the Snowshoe gathering system, it would be one of the largest in Centre County, where construction recently began.

State records show that only 196 unconventional permits -- and more than 1,000 total permits -- have been issued in the county, where there are about 26 producing wells. Unit Corp. has not disclosed its customers in the area or the system's capacity, but Range Resources Corp., WPX Energy Inc., Exco Resources Inc. and Anadarko Petroleum Corp. all have permits in the county.

Unit Corp. originally planned about 14 miles of pipeline for the area, but after scaling back it now expects to spend about $97 million on the system, according to a recent company presentation. The system could also be expanded to include an interconnect with Texas Eastern Transmission. It's expected to be operational by the fourth quarter.

Rising production in the northeast and southwest part of the state has led to a build-out of infrastructure in those regions. In the central part of the state, some exploration and production companies have delineated acreage, but a lack of infrastructure and data has held back more natural gas production.

Unit Corp. has midstream operations in other parts of the state, as well as West Virginia. It also operates gathering and processing facilities in Oklahoma and Texas.

Most of the permits in Centre County were issued between 2008 and 2011, a period known by many in the industry as the "great land grab," when the competition for signing leases in emerging unconventional production basins was particularly high. However, there have been just 17 drilling permits issued in the county since 2012. Interestingly, three of the four permits issued so far in 2015 were given to WPX Energy, despite the fact that company is in the process of exiting the Marcellus Shale (see Shale Daily, May 4).

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