Midstream

A panel of seven Commonwealth Court judges heard oral arguments Wednesday in a lawsuit filed by seven Pennsylvania municipalities and others that claim parts of Act 13, the state’s new omnibus Marcellus Shale law, are unconstitutional.

Copano Energy LLC plans to add an additional 400 MMcf/d of cryogenic processing capacity at its Houston Central complex in Colorado County, TX, to meet demand from producers in the liquids rich Eagle Ford Shale. The expansion would bring Copano’s cryogenic capacity at the facility to 1 Bcf/d. The project is expected to cost $190 million and be in service mid-2014. Copano also announced a new long-term fee-based gathering and processing agreement with a “major” Eagle Ford producer, which combined with previously announced producer commitments, will support the expansion. Copano had previously announced plans for an initial 400 MMcf/d cryogenic processing expansion at Houston Central, which is expected to be in service during the first quarter of 2013 (see Shale Daily, April 21, 2011). “This second cryogenic expansion project reaffirms our commitment to being a leading midstream service provider in the Eagle Ford shale,” said CEO R. Bruce Northcutt.

Moody’s Investors Service on Wednesday downgraded Chesapeake Energy Corp., as well as its midstream and oilfield services units, to “negative” from “stable” because first quarter results pointed to “an even larger capital spending funding gap for 2012” from low natural prices but also because of a planned increase in spending.

MarkWest Energy Partners LP has launched midstream expansions for gathering facilities in two areas of West Virginia and in southwestern Pennsylvania to support growing natural gas production for affiliates of Chesapeake Energy Corp. and Antero Resources Corp.

Energy Transfer Equity LP (ETE) brought Southern Union Co. (SUG) under the ETE banner on Monday, completing a mega merger that creates a midstream powerhouse with more than 44,000 miles of interstate natural gas pipelines and an estimated 30.7 Bcf/d of transportation capacity.

The LaSalle Pipeline — DCP Midstream LP’s project to transport natural gas from the Niobrara Shale in the Denver-Julesburg Basin to markets in Colorado and neighboring areas — has been issued a favorable environmental assessment by the Federal Energy Regulatory Commission. DCP proposes to construct and operate 11.3 miles of 12-inch diameter gas pipeline from its newly constructed LaSalle Gas Plant in Weld County to a proposed interconnect with the Colorado Interstate pipeline. The line would carry up to 230 MMcf/d. The company expects to begin construction on the project by November for completion by March 2013.

Copano Energy LLC and Magellan Midstream Partners LP have formed of a joint venture (JV) to deliver Eagle Ford Shale condensate to Corpus Christi, TX. The JV’s project will make use of new and existing pipeline infrastructure.

SemGroup Corp. and Exterran Holdings Inc. are developing a gas processing plant for SemGas LP to service growing midstream services demand in the Mississippi play. SemGas has agreed to buy the new gas processing plant and associated compression equipment. It is expected that the plant will be designed and fabricated by Exterran to handle a throughput of 60 MMcf/d and will feature cryogenic technology for natural gas liquid extraction and enhanced ethane recovery. Exterran offers pre-engineered processing plants in quantities of 60, 150 and 200 MMcf/d nominal capacity.

SemGroup Corp. has rejected a $1.24 billion takeover bid by Plains All American Pipeline LP, but Plains said it intends to continue to pursue the midstream operator. SemGroup, which emerged from bankruptcy in late 2009, purchases, sells, processes, transports and stores crude oil, natural gas, natural gas liquids, asphalt and refined products. It recently had announced plans to increase the capacity of its gas processing facilities in northern Oklahoma, and the board said the increased processing capacity and other long-term strategies offered a compelling future for its shareholders.