The third phase of a Marcellus Shale gas processing infrastructure expansion program has been completed, adding 120 MMcf/d of cryogenic processing capacity, Range Resources Corp. said Monday.

The project also added 20 miles of gathering and residue pipelines and 21,000 hp of compression. The phase three assets are in southwestern Pennsylvania and are owned and operated by MarkWest Liberty Midstream & Resources LLC, a joint venture of MarkWest Energy Partners LP and Midstream & Resources, a private equity fund. MarkWest Liberty has long-term agreements with Range to provide gathering and processing services and infrastructure assets.

With the expansion Range’s Marcellus Shale capacity is approximately 180 MMcf/d. Processing capacity for high-Btu gas is approximately 155 MMcf/d, while the gathering capacity for dry gas, which does not require processing, is approximately 25 MMcf/d.

With the completion of the additional cryogenic processing facilities, all high-Btu gas will be processed through cryogenic facilities and the existing refrigeration facilities will be removed, Range said. The new cryogenic plant will recover approximately twice the amount of hydrocarbon liquids versus the refrigeration facilities.

Given the high-Btu content of Marcellus Shale gas in southwestern Pennsylvania, coupled with currently strong liquids prices, the Marcellus gas price receives a significant uplift, Range said. Based on the current gas liquids and gas prices, the gross netback at the wellhead is approximately $2.25/MMBtu greater than dry gas, a 45% uplift. As a result, the economics for drilling high-Btu Marcellus wells is extremely attractive.

“…[W]e are now at zero liquid discharge, and we are recycling and reusing 100% of the water in our core [Marcellus Shale] operating area,” said Range CEO John Pinkerton. “Our Marcellus drilling continues to generate exceptional results, and we have made excellent headway driving down costs. We are also making great strides in familiarizing Pennsylvanians, including landowners, elected officials, regulators and conservation groups, on modern, responsible natural gas development.”

Additional high-Btu gas expansion projects are being developed to increase Range’s high-Btu gas infrastructure capacity to 185 MMcf/d by the third quarter of 2010 and to more than 300 MMcf/d by mid-2011. In addition, Range has several dry gas infrastructure projects under consideration, the company said.

On Monday the recently formed Marcellus Shale Coalition (see Daily GPI, Dec. 2) emphasized a commitment by its gas producer members to develop the play responsibly. “Drilling levels are expected to increase and will continue for decades to come. We recognize the need to partner with all interested stakeholders who share our common goal to produce cleaner-burning fuels in balance with environmental excellence,” the group said.

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