EQT Midstream Partners LP said Tuesday it has entered into agreements with a subsidiary of Range Resources Corp. to provide gathering, compression and transmission services for Range's growing Marcellus Shale production in southwest Pennsylvania.
EQT Midstream said it will invest $30 million in gathering infrastructure and another $25 million on a transmission expansion project as part of the agreements. The expansion, which is expected to be in service by November, will add 100 billion Btu/d of capacity to EQT Midstream's transmission system in southwest Pennsylvania.
The agreements include a fee-based 10-year minimum volume commitment for gathering and transmission services. They also provide Range with an opportunity to expand its capacity to 300 billion Btu/d.
Range has the second-largest acreage position of any exploration and production company operating in the Marcellus Shale with 955,000 acres under lease. It continues to grow its position in southwest Pennsylvania in a liquids-rich part of the play.
EQT Midstream COO Randy Crawford said the partnership continues to "benefit from growing demand for pipeline infrastructure throughout the Marcellus region." The company reported a 52% increase in net income last week, mainly as a result of increases in contracted transmission capacity and higher system throughput related to growth in the play.
The partnership was formed by EQT Corp. in 2012 (see Shale Daily, Dec. 12, 2011) to capitalize on upstream developments in the region. Last week, EQT officials said they would continue to restructure and drop down their midstream assets to continue growing EQT Midstream (see Shale Daily, Feb. 13)
With the addition of its agreements with Range, EQT Midstream said Tuesday that it expects to spend $135-$140 million this year, mostly for expansion projects, which the partnership said will increase its total transmission capacity to 3 trillion Btu/d.