Summit Midstream Partners to acquire interest in Utica Shale gathering system

Summit Midstream Partners, LLC (Summit Investments) has announced that it has executed a definitive agreement with Blackhawk Midstream, LLC (Blackhawk), to acquire its equity interest in two entities, Ohio Gathering Company, LLC and Ohio Condensate Company, LLC (together, Ohio Gathering).

Ohio Gathering owns, operates and is developing significant midstream infrastructure in southeastern Ohio consisting of a liquids-rich natural gas gathering system, a dry natural gas gathering system and a condensate transportation, storage and stabilisation facility in the core of the Utica Shale play.

Ohio Gathering owns, operates and is developing significant midstream infrastructure in southeastern Ohio consisting of a liquids-rich natural gas gathering system, a dry natural gas gathering system and a condensate transportation, storage and stabilisation facility in the core of the Utica Shale play.

Equity interest

The equity interests to be acquired by Summit Investments include an option to increase its ownership interest in Ohio Gathering to 40% at any time prior to June 2014 at a price based on the capital invested by the owners at the time the option is exercised. Summit Investments expects to fully exercise the option in the second quarter of 2014.

Upon exercise of the option by Summit Investments, each of MarkWest Utica EMG and MarkWest Utica EMG Condensate will retain its respective 60% ownership interest in Ohio Gathering and will continue to operate and develop the gathering infrastructure. Summit Investments intends to offer all or a portion of its interest in Ohio Gathering to Summit Midstream Partners, LP following the exercise of the option and the subsequent development of the assets.

Leading midstream infrastructure position

Steve Newby, President and Chief Executive Officer of Summit Investments commented, "We are excited to announce an expansion of Summit's relationship with MarkWest, which has developed an industry leading midstream infrastructure position in the heart of the Marcellus and Utica shale plays. We are equally excited about our new relationship with Gulfport, the anchor shipper on Ohio Gathering, which is one of the most active producers in the Utica with over 147 000 net acres under lease in the most prolific part of the Utica Shale."

"Our participation in Ohio Gathering will significantly increase our scale and further diversify our cash flows from a customer and geographic standpoint while maintaining our focus on providing fee-based midstream services under long-term contracts. This transaction provides Summit Investments with an immediate and large-scale presence in the core of the Utica Shale play, where Ohio Gathering anticipates developing more than US$ 3 billion of midstream infrastructure over the coming years. The acquisition and subsequent development of Ohio Gathering will substantially increase the inventory of assets available at Summit Investments to be offered to SMLP."

Adapted from press release by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/06012014/summit_midstream_partners_to_acquire_interest_in_utica_shale_gathering_system/