Aqua America Inc. and Penn Virginia Resource Partners (PVR) announced they have formed a joint venture, Aqua – PVR Water Services, to construct and operate a private pipeline system to supply fresh water to natural gas producers drilling in the Marcellus Shale in north-central Pennsylvania. The 12-inch diameter steel pipeline will largely parallel the trunkline of PVR’s gathering system in Lycoming County and will share PVR’s existing rights-of-way.
PVR is constructing the fresh water pipeline and handling negotiation of water pipeline capacity contracts with producers. Aqua will operate the system when completed and handle water intake supply arrangements. Aqua and PVR each anticipate investing approximately $12 million for construction of the first segment of the project. The joint venture has entered into an agreement with Range Resources to supply fresh water to three of Range’s water impoundments, and negotiations with other area producers for supply agreements are on-going.
The new joint venture has already started construction of the fresh water pipeline, and limited water delivery is expected before year-end. The entire 18-mile long first segment of the system is currently anticipated to be fully completed and begin regular operation during the first quarter of 2012.
*PVR Partners Press Release (Sep 20, 2011) – Aqua America and PVR Partners Announce Joint Venture Private Water Pipeline in the Marcellus Shale