Monday, March 6, 2017
MPLX LP (Findlay, Ohio) subsidiary MarkWest Energy Partners LP and Antero Midstream Partners LP (Denver) have formed a joint venture to support the development of Antero Resources’ extensive Marcellus Shale acreage in the prolific rich-gas corridor of West Virginia. The joint venture is owned 50% by MarkWest and 50% by Antero and is supported by a long-term, fee-based agreement.
As part of the deal, Antero Midstream has agreed to release to the joint venture its 195,000-gross-acre processing dedication, increasing the Marcellus Shale area dedication to MarkWest from about 167,000 gross operated acres to more than 360,000 acres. The additional dedicated acreage includes Antero Resources’ core Marcellus Shale position in Tyler, Wetzel, and Ritchie counties in West Virginia.
To support Antero Resources’ significant production growth profile, the joint venture will expand processing infrastructure at its Sherwood Complex in Doddridge County, W.Va. The Sherwood Complex began operations in October 2012 and has grown to become one of the single largest gas processing complexes in the Northeast, currently with six cryogenic processing trains with 1.2 Bcfd of capacity.
Ongoing development of gas processing infrastructure at the Sherwood Complex includes three new joint venture processing facilities, totaling 600 MMcfd of incremental capacity for Antero Resources. The joint venture expects to commence operations of two of the new facilities during the first quarter and third quarter of this year, and the third new facility during the first quarter of 2018. In addition to the three new processing facilities, the joint venture is contemplating the development of up to another eight processing plants to support Antero Resources, which would be located at both the Sherwood Complex and a new location in West Virginia. MarkWest will continue to construct and operate all processing facilities installed to serve Antero Resources’ production and will also retain full ownership of the first six processing facilities at the Sherwood Complex.
In addition to the development of gas processing infrastructure, the joint venture will support the growth of Antero Resources’ NGL production with fractionation infrastructure at the Hopedale Complex in Harrison County, Ohio. The Hopedale Complex currently has three units providing 180,000 bbld of propane-plus fraction- ation capacity. The joint venture is investing in 20,000 bbld of existing fractionation capacity at the Hopedale Complex, and has an option to invest in future fraction- ation expansions at the complex subject to the production of incremental NGLs from the joint venture’s processing facilities. MarkWest and its affiliates will continue to fully own and operate all NGL pipelines, rail, and marketing infrastructure associated with the Hopedale Complex. In addition, MarkWest will continue to fully own and operate all fractionation facilities and related NGL infrastructure in the Marcellus Shale.
MarkWest will initially contribute existing assets to the joint venture, including the three processing facilities currently under construction at the Sherwood Complex, as well as associated infrastructure related to the operation of the facilities. Antero will initially contribute about $155 million for its allocated share of process- ing assets at the complex and ownership of fractionation capacity at the Hopedale Complex. It is expected that MarkWest and Antero will each contribute 50% of the future capital investments for the joint venture.
“MPLX is excited to continue expanding our midstream operations on behalf of Antero Resources by partnering with Antero Midstream,” said MPLX president Don Templin. “This unique transaction further strengthens our long-term relationship with the largest producer in the Appalachian Basin and provides MPLX with substantial future organic growth opportunities.”
As part of the deal, Antero Midstream has agreed to release to the joint venture its 195,000-gross-acre processing dedication, increasing the Marcellus Shale area dedication to MarkWest from about 167,000 gross operated acres to more than 360,000 acres. The additional dedicated acreage includes Antero Resources’ core Marcellus Shale position in Tyler, Wetzel, and Ritchie counties in West Virginia.
To support Antero Resources’ significant production growth profile, the joint venture will expand processing infrastructure at its Sherwood Complex in Doddridge County, W.Va. The Sherwood Complex began operations in October 2012 and has grown to become one of the single largest gas processing complexes in the Northeast, currently with six cryogenic processing trains with 1.2 Bcfd of capacity.
Ongoing development of gas processing infrastructure at the Sherwood Complex includes three new joint venture processing facilities, totaling 600 MMcfd of incremental capacity for Antero Resources. The joint venture expects to commence operations of two of the new facilities during the first quarter and third quarter of this year, and the third new facility during the first quarter of 2018. In addition to the three new processing facilities, the joint venture is contemplating the development of up to another eight processing plants to support Antero Resources, which would be located at both the Sherwood Complex and a new location in West Virginia. MarkWest will continue to construct and operate all processing facilities installed to serve Antero Resources’ production and will also retain full ownership of the first six processing facilities at the Sherwood Complex.
In addition to the development of gas processing infrastructure, the joint venture will support the growth of Antero Resources’ NGL production with fractionation infrastructure at the Hopedale Complex in Harrison County, Ohio. The Hopedale Complex currently has three units providing 180,000 bbld of propane-plus fraction- ation capacity. The joint venture is investing in 20,000 bbld of existing fractionation capacity at the Hopedale Complex, and has an option to invest in future fraction- ation expansions at the complex subject to the production of incremental NGLs from the joint venture’s processing facilities. MarkWest and its affiliates will continue to fully own and operate all NGL pipelines, rail, and marketing infrastructure associated with the Hopedale Complex. In addition, MarkWest will continue to fully own and operate all fractionation facilities and related NGL infrastructure in the Marcellus Shale.
MarkWest will initially contribute existing assets to the joint venture, including the three processing facilities currently under construction at the Sherwood Complex, as well as associated infrastructure related to the operation of the facilities. Antero will initially contribute about $155 million for its allocated share of process- ing assets at the complex and ownership of fractionation capacity at the Hopedale Complex. It is expected that MarkWest and Antero will each contribute 50% of the future capital investments for the joint venture.
“MPLX is excited to continue expanding our midstream operations on behalf of Antero Resources by partnering with Antero Midstream,” said MPLX president Don Templin. “This unique transaction further strengthens our long-term relationship with the largest producer in the Appalachian Basin and provides MPLX with substantial future organic growth opportunities.”
