Dallas-based Regency Energy Partners and Oklahoma-based American Energy – Midstream (AEU) signed a joint venture Thursday to construct and operate Regency’s Utica Ohio River gathering and transportation facility.
Total project costs are expected to be approximately $500 million, with Regency contributing 75 percent and AEU contributing 25 percent.
Regency will construct and operate the project on behalf of the joint venture.
Regency and AEU also signed a gathering agreement for gas produced from the Utica Shale formation in eastern Ohio by AEU.
Regency and AEU will contribute all previously signed agreements to the joint venture including volume commitments and large acreage dedications.
The project will be upsized to accommodate over 2 billion cubic feet per day (Bcf/d) of firm volume commitments.
The Utica project will include a 52-mile, 36-inch gathering trunkline that can deliver up to 2.1 Bcf/day to the Rockies Express Pipeline (REX) and the Texas Eastern Transmission on the southern end of the line.
The project will also have 25,000 horsepower of compression at the REX interconnect.
The facility can potentially be connected to the interstate grid on the northern end of the trunkline, increasing overall system deliverability to 3.5 Bcf/day.
The full project is expected to be completed in the third quarter of 2015.