Dallas-based Summit Midstream Partners reached an agreement with XTO Energy Inc. to develop a Utica Shale natural gas gathering system servicing XTO’s natural gas production from Belmont and Monroe counties in southeastern Ohio.
The system will be owned and developed by a new indirect subsidiary of Summit Investments, Summit Midstream Utica, LLC.
XTO, a subsidiary of ExxonMobil, will serve as the anchor shipper and has dedicated 29,000 acres to Summit Utica under a long-term, fee-based gathering agreement. Summit Utica will deliver natural gas produced by XTO into Regency Energy Partners’ Utica Ohio River Trunkline project, a 2.1 billion cubic feet per day system that’s under construction, and other downstream delivery points.
Summit Utica will consist of over 115 miles of gathering pipeline with four natural gas compressor stations and will have an initial design capacity of 500 million cubic feet per day. The $400 million project is expected to make the first deliveries to Regency Utica Ohio River in the second half of 2015.
“This development for XTO establishes Summit’s operating presence in the Utica Shale play,” said Steve Newby, president and CEO of Summit Investments.
“Additionally, this transaction increases Summit Investments’ development backlog to more than $2 billion and complements our existing Ohio gathering joint venture with MarkWest Utica EMG where we currently own a 40 percent non-operated interest.”
Summit plans to execute additional gathering agreements “with other large acreage holders in the area over the next several months,” Mr. Newby said.
Stephanie Ritenbaugh: email@example.com or 412-263-4910