MarkWest Utica EMG LLC has clinched an agreement with Rex Energy Corp. to expand its Utica Shale midstream infrastructure.
MarkWest Utica, a joint venture of MarkWest Energy Partners LP and The Energy and Minerals Group (EMG), is developing an integrated system in the Utica to provide low- and high-pressure natural gas gathering systems, natural gas liquids pipelines and processing complexes that would have nearly 800 MMcf/d of capacity and provide 100,000 b/d of C2+ fractionation capacity (see Shale Daily, Jan. 5, 2012).
Rex holds about 4,100 net acres in the Utica’s Warrior South Project, where it has completed three wells. However, a lack of infrastructure has shut in the wells; Rex plans to drill another four wells this year, which would require more midstream services. Under the agreement, the JV would begin gathering and processing the liquids-rich gas by June. Financial details were not disclosed.
MarkWest Energy Partners last year spent $512 million to acquire Marcellus operator Keystone Midstream Services LLC, which was owned by affiliates of Rex, Stonehenge Energy Resources LP and Japan’s Sumitomo Corp. (see Shale Daily, May 9, 2012; May 9, 2011). In addition to the Keystone acquisition, Rex and MarkWest Utica at the time agreed to discuss midstream operations for portions of Rex’s Utica acreage in Ohio.
“MarkWest’s extensive midstream experience will enable Rex Energy to further develop the value of our Warrior South prospects,” said Rex CEO Tom Stabley. “Working together, we will continue to advance the responsible development of Rex Energy’s acreage in the Utica Shale.”
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