As Appalachian Basin operators cut back dry gas investments to focus on liquids, MarkWest Energy Partners LP is accommodating with a major expansion of its Marcellus, Utica and Huron shale operations.
By expanding its existing complexes in Pennsylvania and West Virginia, and building a new complex in Ohio, the midstream operator plans to add more than 600 MMcf/d of processing capacity and 140,000 b/d of incremental fractionation capacity in the region. The expansion would give MarkWest around 2.3 Bcf/d of processing capacity and nearly 300,000 b/d of natural gas liquids (NGL) fractionation capacity.
“Over the past four years, MarkWest has established a market-leading position as the largest provider of natural gas midstream and NGL infrastructure in the Marcellus, and the Marcellus midstream infrastructure projects announced will drive substantial incremental value to MarkWest and our producer customers,” MarkWest CEO Frank Semple said last Tuesday (see related story).
MarkWest plans to bring two 200 MMcf/d processing trains online at its Majorsville complex in 2013, bringing total cryogenic processing capacity at the northern West Virginia facility to 670 MMcf/d.
A subsidiary of Consol Energy Inc. has contracted for an entire 200 MMcf/d train at the proposed Majorsville III plant, in addition to the 30 MMcf/d contract it previously signed for Majorsville II. Consol and joint venture partner Noble Energy Inc. also have associated contracts for NGL fractionation and sales from MarkWest’s complex in Houston, PA — a facility connected to the Majorsville complex. Those agreements were originally assigned to Noble, but the producers are in the process of splitting them evenly.
Consol is currently drilling its first two horizontal wells on acreage in the Majorsville area and expects production to begin in the second quarter. Consol and Noble expect to drill 20 wells in the area this year (see NGI, Jan. 30).
“This agreement is expected to enable Consol Energy and Noble Energy to accelerate and maintain long-term production in the wet portion of the Marcellus Shale, and to keep us on track with the flexible drilling schedule we outlined when we partnered with Noble Energy last year,” said Consol’s Randy Albert, COO of the natural gas division.
Range Resources Corp., an anchor shipper on two ethane projects in the region, also has signed a long-term contract to back MarkWest’s expansion at Majorsville. The producer is expected to announce its 2012 drilling program for the liquids-rich corridor of the Marcellus this month.
As the ethane puzzle in Appalachia clarifies, MarkWest is preparing for production growth by expanding its capacity for the lightest NGL.
Last year MarkWest said it planned to build by mid-2013 two de-ethanization plants capable of producing 75,000 b/d, in conjunction with a pioneering marketing project. However, the company is now planning a third plant to accommodate producer demand, which would increase ethane capacity to 115,000 b/d by 2014 and bring MarkWest’s total NGL capacity in the Marcellus to 175,000 b/d.
To accommodate new production, MarkWest is also building an ethane pipeline between the Majorsville and Houston complexes. MarkWest Utica, a joint venture (JV) with The Energy & Minerals Group (EMG), was announced late last year (see NGI, Dec. 19, 2011). The project would create 700 construction jobs and up to 40 full-time positions. Under the JV, EMG would pay for initial capital spending in the Utica, at which point EMG and MarkWest would split all future costs.
Two processing complexes are planned in Harrison and Monroe counties in eastern Ohio. The Harrison complex would provide 200 MMcf/d of capacity by 2013. The Monroe complex is scheduled to come online in 2013, but capacity plans haven’t been finalized. MarkWest Utica also plans to build a 100,000 b/d fractionation, storage and marketing complex in Harrison County.
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