Regency, American Energy form partnership in Ohio's Utica Shale

Dallas-based midstream company Regency Energy Partners is partnering with American Energy-Midstream on a pipeline project in the Utica Shale.

In addition, Regency and a drilling arm of American Energy called American Energy- Utica (AEU), also struck a deal for natural gas gathering in eastern Ohio, Regency announced Thursday.

Total project costs are expected to be about $500 million, with Regency contributing 75 percent and America Energy–Midstream contributing the rest.

Regency said it will build and operate the project.

"We are excited about the strong growth potential of the Utica Shale, and this project will be a main takeaway option for Utica development, providing interconnectivity with major interstate pipelines in 2015," said Art Cantrell, senior vice president of Regency’s eastern region, in a statement. 

"We are also pleased to partner with AEU, who has a very strong, accomplished management team with a demonstrated track record of success and has committed significant volumes to this project.“

The project will include construction of a 52-mile, 36-inch gathering trunkline that will be able to deliver up to 2.1 billion cubic feet (Bcf/d) to two interstate pipelines: the Rockies Express Pipeline and Texas Eastern Transmission on the southern end of the line.

The project may also be able to connect to the interstate grid on the northern end of the trunkline, increasing overall system deliverability to 3.5 Bcf/d, according to Regency.

Construction of 25,000 horsepower of compression at the Rockies Express interconnect is also planned, the company said.

The project is slated to be completed in the third quarter of 2015.

The American Energy firms are affiliated with Oklahoma-based American Energy Partners, the company launched by Aubrey McClendon, who also co-founded Oklahoma shale giant Chesapeake Energy.

Stephanie Ritenbaugh: or 412-263-4910. Twitter: @StephanieRit

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