12-04-2013

Williams Partners, Shell create midstream JV to serve Shell and other producers

Williams Partners L.P. announced today that it has agreed to launch a new midstream joint venture with Shell to provide gas gathering and gas processing services for production located in Northwest Pennsylvania. The venture will invest in both wet-gas handling infrastructure and dry gas infrastructure serving Marcellus and Utica Shale wells in the area.

The new venture, Three Rivers Midstream, has signed a long-term fee-based dedicated gathering and processing agreement for Shell's production in the area, including approximately 275,000 dedicated acres. The joint venture also plans to pursue gathering and processing agreements with other producers in the liquids-rich areas of Northeast Ohio in addition to Northwest Pennsylvania. 

Three Rivers plans to construct a 200 million cubic feet per day  (MMcf/d) cryogenic gas processing plant and related facilities. The location will be determined at a later date. The planned large-scale gas processing complex would be expandable as Three Rivers' business grows. The initial plant is expected to be placed into service by second  quarter 2015. 

"This new joint venture builds on our strategy of creating large-scale  infrastructure solutions that will provide Shell and other producers with access to the best markets for their natural gas and natural gas liquids, whether they be in the Northeast or the Gulf Coast," said Alan Armstrong, chief executive officer of Williams Partners' general partner. 

"The system is expected to be connected to two major proposed  developments in Pennsylvania – Shell's proposed ethylene cracker (feasibility still being studied) in Beaver County and the proposed Williams - Boardwalk joint venture to develop the Bluegrass Pipeline system that would deliver Marcellus and Utica liquids to the rapidly expanding Gulf Coast and export markets. The proposed Bluegrass pipeline is targeting a late 2015 in-service date. 

"Similar to our strategy of creating a significant supply hub in the dry  gas area of northeast Pennsylvania, Three Rivers will create a major supply hub in northwest Pennsylvania, but with the added benefit of large-scale NGL pipeline infrastructure and expanded market options to support wet-gas production in this area," Armstrong said.