PVR Partners and Hess Corp. have struck a deal for the former to construct an 45-mile natural gas trunkline and gathering facilities to serve Hess’s lean gas production in the Utica Shale in eastern Ohio. The deal also establishes an area of mutual interest (AMI) to the companies.
The AMI covers portions of Belmont, Jefferson and Harrison counties where Hess holds a “substantial” acreage position, PVR said.
PVR will construct a minimum 20-inch diameter trunkline with an expected minimum capacity of 450 MMcf/d and connections to the Texas Eastern and Rockies Express interstate pipelines, with possible future connections to other interstate systems.
Additionally, PVR will construct gathering pipelines, compression stations, dehydration facilities and other related facilities to gather Hess production from the dedicated acreage. Services will be provided on a volumetric fee basis, with no direct commodity price exposure. The project is expected to begin operation in late 2014, and PVR anticipates contracting with additional producers for capacity and gathering services as construction of the system progresses, the company said.
PVR expects the total capital investment for the trunkline, initial gathering lines, compression stations and dehydration facilities to be $125-150 million, and it expects to invest about $10 million during the remainder of 2013 and $50 million during the first half of 2014 and $50 during the second half of 2014, with the balance to come in 2015.
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