MarkWest Energy Partners LP (NYSE: MWE) and The Energy & Minerals Group (EMG) have executed definitive agreements with Gulfport Energy Corp. (NASDAQ: GPOR) to provide stabilization services and potential gathering services for condensate produced within an area that includes Belmont, Harrison, Guernsey, Noble, and Monroe counties, Ohio.
Gulfport is developing its acreage within the wet gas, retrograde condensate, and oil windows of the Utica Shale, and has over 147,000 net acres under lease. In conjunction with these agreements, MarkWest and EMG will form Ohio Condensate Co. LLC, a new joint venture related to the development of industry-leading facilities and services to support the rapid growth of condensate production occurring in the liquids-rich areas of the Utica Shale. Discussions regarding the joint venture’s condensate solutions are also underway with numerous other Utica producers.
Initial infrastructure development will consist of a new condensate stabilization facility, with associated logistics and storage terminal capabilities to be constructed in Harrison County, Ohio, and placed in service by the third quarter of 2014. The facility will have initial stabilization capacity of 23,000 barrels per day (Bbl/d) and an immediate 30,000 Bbl/d expansion is anticipated. It will be co-located and fully integrated with condensate storage, and a truck and rail loading terminal that will be constructed and operated by a subsidiary of Toledo, Ohio-based Midwest terminals and will exclusively serve the joint venture.
Raw condensate will be delivered by truck and stabilized at the facility. Once stabilized, the condensate will be transported by truck and rail to local refinery markets and Canadian export markets. In the future, a condensate gathering system and regional pipelines may be constructed to support additional deliveries to the facility. The facility will also serve as the origin for MPLX LP’s Cornerstone Pipeline, a condensate pipeline project that will terminate near Canton, Ohio, and is scheduled to become operational by late 2016.
MarkWest and EMG are developing the largest fully integrated midstream solution in the Utica Shale, which includes hundreds of miles of gas and natural gas liquids gathering pipeline, up to three large-scale complexes totaling more than 1 billion cubic feet of processing capacity, and 138,000 Bbl/d of ethane and heavier fractionation capacity.