More pipeline news. First Reserve, an investment company that invests primarily in the energy industry, has just pumped $100 million into a joint venture that will give it 50% ownership in two new pipeline gathering systems in Greene and Clearfield counties in Pennsylvania. Both pipelines service the Marcellus Shale drilling industry in those areas.
First Reserve Corporation, a leading private investment firm in the energy industry, announced today that it has entered into an agreement to provide an equity commitment of $100 million from its Energy Infrastructure Fund to a joint venture with Energy Corporation of America (“ECA”).
Through the joint venture, First Reserve will own a 50% interest in two newly constructed gathering systems located in Pennsylvania’s Greene and Clearfield counties. Both systems service the Marcellus Shale which has been bolstered by strong drilling results for natural gas. The joint venture will operate under long-term contracts with a fixed take-or-pay structure.
In addition to the initial investment, the joint venture intends to explore the opportunity to develop new or expand existing gathering systems in the region to accelerate the production of additional hydrocarbons. ECA is one of the oldest operators in the Appalachian Basin with a significant acreage position.
“ECA is delighted to have the excellent midstream partner, First Reserve. This partnership will accelerate Pennsylvania infrastructure development and provide natural gas transportation capacity for all the operators in the area,” John Mork, CEO of ECA said.
“We continue to see significant infrastructure investment opportunities in the Marcellus Shale and are excited by our partnership with Energy Corporation of America,” said Mark Florian, Managing Director at First Reserve Corporation. “Given the volume of exploration and production activity in the region, these systems are ideally positioned to provide E&P operators with access to a high quality midstream infrastructure.”*
*First Reserve Press Release (Oct 11, 2011) – First Reserve Commits $100 Million Equity for Marcellus Shale Gathering Systems