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American Energy Partners Adds Utica NatGas Services

The Utica Shale affiliate of American Energy Partners LP (AEP-LP) late Monday secured more services in Ohio to expand its natural gas gathering, processing and fractionation capabilities.

MarkWest Utica EMG LLC, a joint venture (JV) of MarkWest Energy Partners LP and The Energy & Minerals Group, and Ohio Gathering Co. LLC, a JV of MarkWest Utica EMG and Summit Midstream Partners LLC, completed agreements with American Energy-Utica LLC (AEU) to provide the midstream services. AEU dedicated more than 60,000 net acres in the rich-gas and condensate windows to the two JVs.

Under the terms of the AEU agreements, the MarkWest JV would provide processing services at the Cadiz complex in Harrison County, OH, and Seneca complex in Noble County, OH. Combined, the two facilities now provide 725 MMcf/d of total processing capacity to eight customers. Based on previous commitments, the two complexes would be expanded to more than 1.3 Bcf/d of processing capacity by mid-2015.

MarkWest Utica EMG would fractionate AEU's natural gas liquids (NGL) at its jointly owned Hopedale complex, which now includes 60,000 b/d of propane and heavier NGLs fractionation capacity. Hopedale capacity is to be doubled to 120,000 b/d by early 2015. The 40,000 b/d de-ethanization facility at the Cadiz complex would be used to produce purity ethane on behalf of AEU for delivery to the Appalachia-to-Texas, or Atex, pipeline (see Shale Daily, Dec. 5, 2013).

Ohio Gathering was designated to provide gas gathering and compression services for all of AEU's gas produced from the dedicated area. The system now consists of hundreds of miles of low- and high-pressure pipelines and several compression facilities throughout southeastern Ohio, including Harrison, Guernsey, Belmont, Noble and Monroe counties.

AEP-LP affiliates in June picked up acreage in Ohio, Texas and West Virginia in transactions that combined were worth $4.25 billion (see Shale Daily, June 9). In Ohio, AEU acquired 27,000 net acres in Monroe County with net production of 40 MMcfe/d. The Utica acquisition at that time marked AEU's seventh major acquisition in the southern Utica play, with estimated acreage of 280,000 net acres (see Shale Daily, Feb. 20).

AEU as of June had invested more than $3.5 billion in the Utica and had said it planned to drill 2,600 gross wells and 1,600 net wells on the acreage in the years ahead.

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