Long-term natural gas gathering agreements to anchor the Appalachian Gathering System (AGS), which is to traverse the Marcellus Shale, have been signed with subsidiaries of Chesapeake Energy Corp. and Statoil ASA, M3 Midstream LLC (Momentum) said Thursday.

The agreements with Chesapeake Energy Marketing Inc. and Statoil Natural Gas LLC cover some of the Marcellus Shale leases controlled by the two producers in northern West Virginia and southwestern Pennsylvania. No additional details were provided.

Construction of the 130-mile-long AGS, which is expected to be ready in early 2012, is under way; it is expected to have capacity of up to 730 MMcf/d.

The AGS, once completed, would more than double Momentum's current throughput.

Recently Magellan Midstream Partners LP and Momentum said they are developing a 180-mile pipeline originating in LaSalle and Live Oak counties, TX, and terminating in Corpus Christi, TX, to carry crude oil and condensate from the Eagle Ford Shale to Magellan's distribution terminal in Corpus Christi (see Shale Daily, March 8).

The midstream company since 2004 has developed greenfield projects in the Barnett and Haynesville shales and the Piceance Basin (see Daily GPI, Aug. 11, 2008). Its gathering systems in Wyoming and East Texas include about 1,800 miles of pipeline, 10 processing and treating plants, 33,000 hp of compression and a combined throughput of more than 680 MMcf/d.

According to Momentum, the AGS would span Pennsylvania's Washington and Greene counties, as well as West Virginia's Monongalia, Marion and Harrison counties. Access would be provided to the Texas Eastern Transmission market point in southern Pennsylvania and could, in the future, provide access to both Columbia Gas Transmission and Dominion Transmission, it said.

For information on the AGS contact Les Smith at (713) 243-3008 or Brant Baird at (713) 243-3005.