UGI Corp. midstream unit UGI Energy Services Inc. has agreed to gather Marcellus Shale production of Citrus Energy Corp. in Wyoming County, PA, for delivery to Tennessee Gas Pipeline Co.’s interstate system in Susquehanna County.

UGI Energy Services will acquire and construct facilities to handle up to 120,000 Dth/d. Subject to permitting and regulatory approvals, service is expected to begin as early as spring 2011.

“This is our first project to provide gas gathering infrastructure to Marcellus natural gas producers,” said Peter Terranova, UGI Energy Services vice president of midstream assets and services.

UGI previously announced that it plans to invest $300 million over the next two years on midstream projects to support development of infrastructure in the Marcellus Shale region. Among these investments is a recently announced agreement between UGI Energy Services and NiSource Gas Transmission and Storage to market and develop a major pipeline project to provide Marcellus Shale producers in Pennsylvania improved access to high-value markets (see Daily GPI, Aug. 16).

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