Summit Midstream Partners, LLC (Summit Investments), the privately held company that owns and controls the general partner of Summit Midstream Partners, LP (SMLP) and also owns a 49.5% limited partner interest in SMLP, has announced that it has reached an agreement with XTO Energy Inc. to develop and operate a new natural gas gathering system servicing XTO’s natural gas production from Belmont and Monroe counties in southeastern Ohio. The gathering system will be owned and developed by a new indirect subsidiary of Summit Investments, Summit Midstream Utica, LLC (Summit Utica). XTO will serve as the anchor shipper and has dedicated approximately 29 000 acres to Summit Utica under a long-term, fee-based gathering agreement.
Summit Utica will gather, compress, and deliver natural gas produced by XTO into Regency Energy Partners LP’s 2.1 billion ft3/d high-pressure Utica Ohio River Trunkline project (Regency Utica Ohio River), which is currently 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 approximately 500 million ft3/d. The US$400 million, multi-year development of the Summit Utica gathering system is currently underway and first flows to Regency Utica Ohio River are expected in the second half of 2015.
Steve Newby, President and CEO of Summit Investments commented: “The announcement represents a significant step for the Summit enterprise. This development for XTO establishes Summit’s operating presence in the Utica Shale Play. Additionally, this transaction increases Summit Investments’ development backlog to more than US$2.0 billion and complements our existing Ohio Gathering joint venture with MarkWest Utica EMG where we currently own a 40% non-operated interest.”
“We are excited to deepen our relationship with XTO and to serve as their natural gas gathering partner in this strategically important and fast growing basin. We also look forward to executing additional gathering agreements with other large acreage holders in the area over the next several months.”
Adapted from press release by Rosalie Starling