Source: EQT Corporation
EQT Corporation (NYSE:EQT) revealed that MarkWest Energy Partners, L.P. (NYSE:MWE) is acquiring EQT’s natural gas processing complex in Langley, Kentucky and an associated natural gas liquids (NGL) pipeline for $230 million. The transaction is expected to close during the first quarter 2011.
The Langley processing complex includes a 100 million cubic feet per day (MMcfd) cryogenic processing plant, a 75 MMcfd refrigeration processing plant, and approximately 28,000 horsepower of compression. Immediately following the closing of the acquisition, MarkWest will commence the installation of a new 60 MMcfd cryogenic processing plant to expand the Langley cryogenic processing capacity. In conjunction with the closing of the sale of the Langley plant, EQT will execute a long-term agreement with MarkWest to provide processing services for its Kentucky Huron/Berea shale gas and to extend its existing agreement with MarkWest for NGL transportation, fractionation, and marketing services until 2022.
MarkWest will also complete the Ranger NGL pipeline, which is currently under construction, to allow NGLs recovered at the Langley processing complex to be delivered to MarkWest’s Siloam fractionation, storage, and marketing complex in South Shore, Kentucky. In 2008, MarkWest significantly expanded the Siloam fractionator to a capacity of 24,000 barrels per day, in part to support the continued growth of EQT’s Huron/Berea shale development in Kentucky and West Virginia. MarkWest will also process EQT’s liquids-rich Marcellus gas in West Virginia.
"The sale of these valuable Kentucky assets is the first step in our commitment to prioritize our capital to our most profitable investment opportunities, which for us means development activities, primarily in the Marcellus and also in the Huron/Berea, rather than processing activities," said David Porges, president and chief executive officer of EQT. "Consistent with this, we are pleased to expand EQT's long-standing relationship with MarkWest in our existing Kentucky processing and liquids handling and in new processing and liquids handling that will support the development of West Virginia Marcellus shale."