UGI Corp. has entered into agreements with Tenaska affiliate Tenaska Resources LLC to jointly develop natural gas resources in the Marcellus Shale in north-central Pennsylvania, the company said Monday.
UGI Energy Services Inc. (UGIES) will construct and operate about 20 miles of gathering pipelines and related gas processing and compression facilities for wells that Tenaska intends to drill in Potter County, PA, with the first phase of construction targeted for late this year or early 2014, UGI said.
“The initial investment in the proposed gas gathering system is estimated to be up to $25 million, with the total investment in gathering for full development of Tenaska’s Potter County acreage estimated to be in the range of $65 million over 10 years,” UGI said.
UGI has also invested $25 million for an approximate 19% nonoperating working interest in acreage that Tenaska operates in Tioga County, PA.
Both projects are near UGI’s midstream and distribution assets, including 14.7 Bcf of natural gas storage.
UGIES also plans to build an extension of its Auburn Gathering System (see Shale Daily, Aug. 7, 2012). The project calls for extending Auburn from its terminus in Wyoming County, PA, to Luzerne County, PA, and for building a connection to the Transcontinental Gas Pipe Line. The extension is expected to be in service in the second or third quarter of 2013.
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