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MarkWest Moving Forward With More Appalachian Processing Projects

MarkWest Energy Partners LP continues to implement its efforts to meet growing demand for natural gas processing in the Appalachian Basin, saying it placed into service five major infrastructure projects during 2Q2014 and will construct seven more projects this year.

The proposed infrastructure projects would add 720 MMcf/d of processing capacity and 110,000 b/d of fractionation capacity, MarkWest officials said during a conference call with analysts.

The infrastructure projects placed into service in the second quarter consisted of two processing plants with 320 MMcf/d of capacity in the Marcellus Shale, a 200 MMcf/d processing plant in the Utica Shale, 20,000 b/d of ethane and heavier fractionation in the Marcellus, and a 40,000 b/d de-ethanization facility in the Utica Shale.

"The completion of five major infrastructure projects in the Marcellus and Utica shales over the past three months has provided our producer customers the ability to continue expanding their rich-gas development programs," said CEO Frank Semple. "Due to their ongoing success, we expect overall system volumes to continue to rapidly expand and provide us with unique opportunities to significantly grow cash flow and achieve future distribution growth targets."

MarkWest unveiled plans to develop Cadiz III, a 200 MMcf/d processing plant at the Cadiz complex in Harrison County, OH. The facility is expected to begin operations during the first quarter of 2015, increasing total processing capacity of the Cadiz complex to 525 MMcf/d. The company is also expecting to begin operations of the new 200 MMcf/d Cadiz II plant next month to support rich-gas production from Gulfport Energy and other producers.

MarkWest has 19 major processing and fractionation projects under development at nine locations in Ohio, West Virginia and Pennsylvania.

Earlier this year, MarkWest officials said that they can't build processing and fractionation facilities fast enough to keep up with rising production in the basin (see Shale Daily, Feb 3).

Last month, MarkWest started up a third cryogenic plant at its Seneca complex in Noble County, OH, increasing capacity there to 600 MMcf/d (see Shale Daily, July 23). The company plans to complete a fourth 200 MMcf/d processing train there in 2Q2015. Additionally, the company recently completed a 40,000 b/d de-ethanization facility at the Cadiz facility, where ethane produced will be delivered to the Appalachia-to-Texas Express pipeline, which began service early this year (see Shale Daily, Dec. 5, 2013).

In June, MarkWest announced plans to double the propane and heavier fractionation capacity at its Hopedale complex in Harrison County, with an expansion expected to be complete by the first quarter of 2015, and brought online its Bluestone II facility in western Pennsylvania to boost capacity in that region (see Shale Daily, June 6; June 2).

MarkWest also plans to build a fourth processing plant at its Carthage facilities in Panola County, TX, to support growing rich-gas production from the Haynesville Shale and Cotton Valley formation. The plant would have an initial capacity of 120 MMcf/d. It would increase total processing capacity at the partnership's East Texas operations to 520 MMcf/d when it begins operations early next year.

MarkWest's good news this year was marred by a lightning strike and small fire that damaged a heat exchanger at the 355 MMcf/d Houston midstream complex in Chartiers Township, about 30 miles southwest of Pittsburgh (see Shale Daily, May 29). The facility wasn't able to operate at full strength again for nearly two months.

MarkWest reported 2Q2014 earnings before interest, taxes, depreciation and amortization of $208.2 million, compared to $155.7 million in 2Q2013.

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