Columbia Pipeline Group, Inc. (CPG) and Columbia Pipeline Partners LP (together, Columbia), announced that Three Rivers Midstream LLC – an affiliate of Williams Partners L.P. – has become a member of Pennant Midstream, LLC, a joint venture between affiliates of Columbia Midstream Group, LLC (an indirect wholly-owned subsidiary of CPG), and Harvest Pipeline Company.
The joint venture
"We are pleased to add Three Rivers Midstream as a high-quality partner to this joint venture," said Columbia Pipeline Group President Glen Kettering, noting that the combination is expected to significantly increase Pennant's long-term infrastructure investment opportunities. "Pennant leverages our extensive asset base and operating experience in the Utica Shale region to create near-term value, as well as long-term sustainable growth for our customers and shareholders."
The executed agreement nearly triples the acreage dedicated to Pennant to approximately 500 000 acres and results in the addition of investment-grade producers, positioning Pennant to be a leading long-term midstream services provider in the Mahoning Valley.
Williams Partners’ initial ownership investment in Pennant is 5%, and by funding specified, disproportionate investment amounts for future growth projects, Williams Partners can invest directly in the growth of the joint venture. Such funding will potentially increase Williams Partners’ Pennant ownership up to 33.33% over a defined investment period.
Comments from Pennant
"Three Rivers is a logical partner for Pennant,” said Brett Stovern, Pennant President. “The company’s extensive commercial and operations knowledge in the Appalachian Basin will further increase our leadership position over our Utica footprint. With strong processing, gathering and transport infrastructure in place, and the ability to significantly expand and leverage our asset position, we look forward to supporting further shale production in the Mahoning Valley."
Pennant owns the Hickory Bend processing plant and related gathering systems in Pennsylvania and Ohio. The approximately US$400 million investment includes:
- Approximately 41 miles of 12 in., 20 in. and 24 in. wet gas field-gathering and high-pressure pipeline facilities.
- The Hickory Bend cryogenic natural gas processing plant in New Middletown, Ohio.
- A residue pipeline with current deliveries to Dominion East Ohio and Kinder Morgan’s Tennessee Gas Pipeline.
- An approximately 38 mile NGL pipeline from the Hickory Bend processing plant to Utica East Ohio’s Kensington Plant in Columbiana County, Ohio.
“The Hickory Bend system demonstrates many characteristics of infrastructure we want in our portfolio – new, large-scale, easily expandable and, importantly, highly efficient when it comes to NGL recovery and fuel consumption,” said Jim Scheel, Williams Partners Senior Vice President, Northeast G&P. “Additionally, by leveraging Pennant’s existing gathering and processing facilities we’re able to serve customers in this area in a timelier manner than if we built our own facilities.”
Edited from source by Stephanie Roker
Read the article online at: https://www.worldpipelines.com/business-news/06102015/joint-venture-for-three-rivers-and-pennant/