PVR lands Hess deal to build Utica shale pipeline
PVR Partners LP, an Eastern Pennsylvania midstream company, is teaming with Hess Corp. (NYSE: HES) as it expands into the Utica Shale play in eastern Ohio.
PVR (NYSE: PVR) has been tapped to build, own and operate a 45-mile natural gas trunkline and gathering pipelines and facilities for Hess. The company is expected to have a total capital investment of between $125 million to $150 million. The project should be online in late 2014, according to a statement from PVR.
“PVR is pleased to announce this strategic expansion of our midstream business into the Utica Shale and we welcome the opportunity to serve Hess Corp., a world-class energy provider,” said Bill Shea, president and CEO of PVR, in a written statement. “We believe Hess’s selection of PVR as their midstream provider in the Utica Shale is another validation of our growing reputation for supplying reliable high-quality midstream services to meet the needs of shale gas producers.”
The project consists of a minimum 20-inch diameter trunk line with anticipated minimum capacity of 450 million cubic feet per day and connections with the Texas Eastern and Rockies Express interstate pipelines, according to PVR. Additional connections could also be added to other interstate pipelines. The project also includes constructing compression stations, dehydration and other facilities.
PVR is expected to invest $10 million in this project during the rest of 2013 and another $50 million during the first half of 2014. An additional $50 million will be invested in the second half of 2014 and the remainder in 2015, according to the company.
MATCOR’s Insights that Work
This is great news for the Utica Shale region with this natural gas pipeline. However, there is a large responsibility for pipeline safety, cathodic protection management and more.
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