By Debbie Cai
Energy company Williams Partners LP (WPZ) said it will form a
joint venture with Royal Dutch Shell PLC (RDSA, RDSB) to provide
gas-gathering and gas-processing services for production located in
northwest Pennsylvania.
The Three Rivers Midstream venture will invest in both wet-gas
handling infrastructure and dry-gas infrastructure serving
Marcellus and Utica Shale wells in the area, Williams said.
Alan Armstrong, chief executive of Williams Partners' general
partner, said Three Rivers will create a major supply hub in
northwest Pennsylvania, with the added benefit of large-scale
natural-gas liquids pipeline infrastructure and expanded market
options to support wet-gas production in the area.
Three Rivers has signed a gathering and processing agreement for
Shell's production in the area, including about 275,000 dedicated
acres, Williams said. The joint venture also plans to pursue
gathering and processing agreements with other producers in the
liquids-rich areas of northeast Ohio in addition to northwest
Pennsylvania.
Three Rivers also plans to construct a 200 million cubic feet
per day cryogenic gas processing plant, which is expected to begin
service by the second quarter of 2015.
Williams Partners, which holds midstream and interstate
gas-pipeline assets, said it will initially own substantially all
of Three Rivers Midstream and operate the assets, while Shell has
the right to invest capital and increase its ownership prior to
mid-2015. Williams expects its initial capital expenditures on the
plant, not including the gathering system, to be approximately $150
million.
In February, Williams reported that its fourth-quarter profit
decreased 29% due to a sharp midyear decline in natural-gas-liquid
prices last year.
Shares of Williams Partners rose 0.9% to $53.25 in after-hours
trading. The stock is up 8.5% so far this year.
Write to Debbie Cai at debbie.cai@dowjones.com
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