MarkWest Energy is selling some of its natural gas gathering facilities in West Virginia for $210 million as it focuses on growing processing needs elsewhere in the Marcellus and Utica shales, the company said Wednesday.
The sale of these gas gathering assets in Doddridge County, West Virginia, to Dallas-based Summit Midstream Partners, gives Summit an entry into the unconventional Northeast play.
"While liquids production is ramping up quickly in West Virginia, this is not a strategic area for us overall," said MarkWest spokesman Joshua Hallenback. "The cash from this transaction will be redeployed to the 18 major rich gas processing and fractionation projects we have planned over the next year and a half."
The assets include more than 40 miles of newly constructed high-pressure gas gathering pipelines, certain rights-of-way associated with the pipeline and two compressor stations totaling over 21,000 horsepower of combined compression.
Rich gas gathered by these facilities is dedicated to MarkWest for processing at its Sherwood complex, also located in Doddridge County.
The transaction is expected to close sometime this month.
The rich-gas gathering and compression system is supported by a long-term, fee-based contract with an affiliate of Antero Resources, the anchor producer at MarkWest's Sherwood complex.
Antero is a leading Marcellus producer with more than 312,000 net acres in the southwestern core of the play, the statement said. In northern West Virginia, Antero has 14 drilling rigs in operation and has access to 400,000 Mcf/d of dedicated cryogenic processing capacity at the Sherwood complex.
By the end of 2014, MarkWest is expected to have over 4 Bcf/d of processing capacity and 275,000 b/d of fractionation capacity in the Marcellus and Utica shales, the statement said.
"This transaction provides MarkWest with ongoing financial flexibility to support our large set of processing, fractionation and NGL transportation projects that are currently being developed in the Marcellus and Utica shales," said Frank Semple, MarkWest's chairman, president and CEO.
