MOSCOW (MRC) -- Williams Partners 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, informed Hydrocarbonprocessing with reference to the company's announcement.
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.
Three Rivers plans to construct a 200 million cubic feet per day cryogenic gas processing plant and related facilities, with the location to 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, CEO 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," he continued." The proposed Bluegrass pipeline is targeting a late 2015 in-service date.
Williams Partners' portion of initial capital expenditures on the Three Rivers plant, not including the gathering system, is expected to be approximately USD150 million. Subsequent capital investment is expected as the joint venture's business and scale increases.
As MRC reported earlier, in late March, Williams approved the construction of a propane dehydrogenation (PDH) facility in Alberta, Canada, the first and only one in Canada, which will allow Williams to significantly increase production of polymer-grade propylene from its Canadian operations.
Williams is one of North America's largest natural gas gatherers and processors. Williams also has a growing midstream business in Canada focused on processing oil sands off-gas into NGLs and olefins. It also has a domestic olefins business that provides customers in the petrochemical industry with a full suite of products and services.
MRC