DTE Energy Buys Marcellus/Utica Pipelines for $1.3B

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Click for larger version of AGS System map

The buyouts keep on rolling in. Detroit-based DTE Energy announced yesterday they are buying 100% of M3 Midstream’s Appalachia Gathering System (AGS), located in Pennsylvania and West Virginia, and 40% of M3’s Stonewall Gas Gathering (SGG), located in West Virginia. In addition DTE is buying another 15% of SGG owned by Vega Energy Partners. The combined deals will cost DTE $1.3 billion. Whew! Lots of moving parts in this story. Let’s sort it out. In April 2015 MDN told you that a section of M3 Midstream’s Appalachia Gathering System (AGS) had been spun off into its own company called Stonewall Gathering System (see M3’s New Stonewall Gathering System Extends Existing AGS in WV). At the time, plans were under way to build out gathering pipelines in West Virginia’s Harrison and Doddridge counties, running through Lewis and into Braxton County where the pipeline will connect with Columbia Transmission’s interstate pipeline. The plans came to fruition and the Stonewall Gathering System was built and now gathers 1 billion cubic feet of Marcellus Shale gas per day (see Construction on WV Stonewall Gather Pipeline Begins, Runs Thru Dec). Why does DTE want these two pipeline systems? Because they will provide a reliable source cheap, abundant, clean-burning Marcellus/Utica natural gas to DTE’s utility customers in the Midwest. These gathering systems already connect to the Columbia Gas Transmission and the Texas Eastern Transmission pipeline systems. They will also connect to the NEXUS Gas Transmission pipeline once it’s built…
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M3 Donates New Building to Township in Harrison County, OH

m3 midstreamWe’ve written plenty of stories about midstream (pipeline) companies “giving back” to the communities where they either currently, or plan in the future, to operate. Typically midstream companies donate a few thousand dollars to various nonprofit groups. It adds up. Recently PennEast Pipeline donated $85,000 to 17 different groups (see PennEast Pipeline Spreads Some More Coin in PA/NJ Communities). The Constitution Pipeline just handed out another $50,000 and has now handed out over $2 million in grants to nonprofits (see Constitution Pipeline Doles Out Another $50K in Grants, Despite NY). But this is the first time we’ve heard of a midstream company giving a new building away! M3 Midstream (Momentum) has donated a brand new 5-bay building for North Township in Scio, OH–where they operate a natural gas processing plant. And that’s not the only thing M3 has done for the town. Needless to say, local town leaders are happy as clams…
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M3’s Stonewall Gathering System in WV Gets New Investor/Partner

In April 2015 MDN told you that a section of M3 Midstream’s Appalachia Gathering System (AGS) had been spun off into its own company called Stonewall Gathering System (see M3’s New Stonewall Gathering System Extends Existing AGS in WV). At the time, plans were under way to build out gathering pipelines in West Virginia’s Harrison and Doddridge counties, running through Lewis and into Braxton County where the pipeline will connect with Columbia Transmission’s interstate pipeline. The plans came to fruition and the Stonewall Gathering System was built and now gathers 1 billion cubic feet of Marcellus Shale gas per day (see Construction on WV Stonewall Gather Pipeline Begins, Runs Thru Dec). The project now has a new investor/co-owner. WGL Midstream announced yesterday that it has exercised an option to invest $89 million in the Stonewall Gas Gathering System, representing a 35% ownership stake…
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Williams Buys Less of Utica East Ohio than Previously Planned

In April MDN told you that Williams would buy out EV Energy Partners 21% share in Utica East Ohio (UEO)–a midstream/pipeline company operating in Ohio (see Williams Buys Out EVEP Interest in Utica East Ohio Midstream for $575M). The original press releases in April, from both Williams and EVEP, clearly state that Williams would buy the entire 21% EVEP share in UEO. But that didn’t happen. Yesterday Williams announced they have closed on an additional 13% from EVEP (not 21%) and for $357 million (not $575 million). The Williams press release says the other 8% share went to the other partner in the venture. You have to read the EVEP press release to learn that the other partner is M3 Midstream, otherwise known as Momentum. Seems a funny thing happened on the way to the forum…
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Construction on WV Stonewall Gather Pipeline Begins, Runs Thru Dec

In early April MDN told you that a section of M3 Midstream’s Appalachia Gathering System (AGS) had been spun off into its own company called Stonewall Gathering System (see M3’s New Stonewall Gathering System Extends Existing AGS in WV). At the time plans were under way to build out gathering pipelines in West Virginia’s Harrison and Doddridge counties, running through Lewis and into Braxton County where the pipeline will connect with Columbia Transmission’s interstate pipeline. The plans have come to fruition and the Stonewall Gathering System is now being built. Incidentally, they’re looking for welders and laborers–but only through local unions…
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M3’s New Stonewall Gathering System Extends Existing AGS in WV

All the way back in 2011 MDN told you about M3 Midstream’s Appalachia Gathering System (AGS), a local gathering pipeline system to serve dry gas production areas in northern West Virginia and southwestern Pennsylvania (see New Marcellus Shale Pipeline Coming to Southwestern PA, Northern WV). AGS was slated to be approximately 130 miles of large diameter gathering pipeline spanning Washington and Greene counties (in PA), and Monongalia, Marion and Harrison counties (in WV). Since that time we haven’t heard much–the project has flown mostly under the radar. It has, however, popped back up in the news in WV, so we thought it would be a good time to give you an update on the project…
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Harrison, OH a Hub for Midstream Processing – Continues to Grow

A few weeks ago MDN told you that Access Midstream and partners M3 Midstream and EV Energy Partners are planning to boost capacity and add a second “processing train” to their Leesville, OH gas processing complex (see Access Midstream: Major Expansion of Utica Processing Facility). With added capacity, the complex will be able to process 1.1 billion cubic feet of natural gas per day! In addition, the jv partners’ Scio, OH facility is currently building a third processing train to their fractionation (liquids-separating) operation…
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Rice Energy Picks Up Pipelines in SWPA in Deal with M3 for $110M

Rice Energy, one of our favorite newer drilling companies, announced yesterday they’ve put some of that IPO money to good use (see Rice Energy IPO Soars, Brings in $84M More Than Expected). Rice has purchased a 28-mile pipeline gathering system already up and running in Washington County, PA from M3 Midstream for $110 million cash on the barrel head. The deal also includes rights of way to build more gathering pipelines in both Washington and Greene counties. Rice Energy owns leases and is conducting active drilling in both counties.

The Marcellus and Utica Shale Databook, Vol. 3 (just out) shows Rice with 28 unique well location permits in Washington County, PA for the last four months of 2013, and 9 unique well location permits in Greene County (via Alpha Shale Resources, which Rice recently picked up in a deal with Alpha Natural Resources). Makes perfect sense Rice would want to buy the pipelines that connect to their wells and get a piece of the midstream action in the white hot Marcellus region of SWPA. Here’s yesterday’s announcement:
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Gov. Kasich “Turns the Valves” at Scio Fractionation Plant

MDN told you that Ohio Gov. John Kasich went foreigner-hunting on Monday and was glad to find no “foreigners” (i.e. out-of-state workers) lurking around the Hickory Bend processing plant in Mahoning County that he was visiting for a dedication ceremony (see OH Gov. Kasich Dedicates Hickory Bend Plant, No Foreigners Found). While he was in the general neighborhood, Gov. Kasich also slipped over to Harrison County on Monday to check out the Scio fractionation plant (now being called the Harrison Hub), to see if there were any foreigners hiding there. Nope! A banner day for Gov. Kasich!

The Scio plant, built by the Utica East Ohio Buckeye joint venture (M3 Midstream, Access Midstream and EnerVest) held a “turn the valves” dedication on Monday to take advantage of Kasich being in the area. Phase 2 of the plant went online in July adding an additional 45,000 barrels per day of NGL processing capacity. Phase 3 is now being build and due to go online in early 2014. Highlights from the Kasich visit and more details about the plant from UEO officials…
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NiSource & M3 Do a Deal to Process/Sell NGLs in Eastern Ohio

An important announcement yesterday for drillers (and landowners) in the northern portion of the Ohio Utica Shale play: Pennant Midstream announced they are building a 38-mile natural gas liquids (NGL) pipeline from the Pennant-owned Hickory Bend cryogenic processing plant (in Mahoning County, OH) to the Utica East Ohio Midstream-owned Kensington cryogenic processing plant (in Columbiana County, OH). Pennant says initially they will ship 90,000 barrels per day through the new pipeline.

Why is Pennant with its own processing plant sending NGLs to another (competitor’s) processing plant? Good question…
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M3’s Kensington, OH NGL Plant Now Live & Processing

A new $400 million natural gas liquids (NGL) processing plant in Kensington (near Hanoverton, OH) has went online Sunday. The Utica East Ohio Midstream (UEO) plant, a joint venture owned by M3 Midstream, Access Midstream (formerly Chesapeake Energy) and EV Energy Partners, was originally supposed to be online in May. That date slipped. In June, MDN picked up on a bit of news that indicated the plant would go live “by the end of July” (see M3 Midstream’s Kensington, OH NGL Plant Launch Date Slips). The July rumored date proved correct.

Yesterday, M3 issued the following press release announcing that the UEO plant is now operating and processing NGLs. It is the first plant of its kind to go online in the Utica Shale:
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M3 to Build Heliports at OH Processing Plants “Just in Case”

Utica East Ohio Midstream–a joint venture between M3 Midstream, Access Midstream and EV Energy Partners–is in the process of building three natural gas processing plants in eastern Ohio. Two of the plants–Leesville (in Carroll County) and Kensington (in Columbiana County) will be cryogenic plants used to separate natural gas liquids from methane. MDN recently told you about delays in building the Kensignton plant (see M3 Midstream’s Kensington, OH NGL Plant Launch Date Slips). The third facility, located in Scio (Harrison County), will be a fractionation plant used to further separate NGLs from Kensington and Leesville into their constituent compounds, like ethane, propane and butane. Both Kensington and Scio are scheduled to go online sometime “this summer” (see Scio fractionation plant scheduled to go online this summer).

This story, however, is not about  schedules for the launch of Utica East Ohio’s plants. It is about M3’s plans to build heliports at the Kensington and Scio plants…
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M3 Midstream’s Kensington, OH NGL Plant Launch Date Slips

In May 2012, MDN told you about a new $400 million natural gas liquids (NGL) processing plant that would be built in Kensington, about a mile south of Hanoverton, OH, by a joint venture involving M3 Midstream, Chesapeake Energy and EV Energy Partners (see Location for OH NGL Processing Plant Identified). M3 said the Kensington NGL plant was on track for an “aggressive” May 2013 opening as late as December last year (see Columbiana County NGL Plant On Track for May Opening). It’s end of June and the plant is still not running.

We do, however, have a new estimated start date…
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Kensington, OH NGL Processing Plant Construction Progress

Midstream build-out will be the big story of 2013 in the Utica Shale. One of the big projects under way is a natural gas processing facility in Kensington, Ohio, being built by a partnership between M3 Midstream (better known as Momentum), Chesapeake Energy and Enervest. The entire project will take five years to build, with the first portion going online sometime this year.

The latest on the Kensington project, being built in Columbiana County:

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Columbiana County NGL Plant Creates Economic Boom

More evidence of just how much the shale drilling industry impacts local businesses (the “supply chain” effect) comes from the new $400 million natural gas liquids processing plant being built in Columbiana County, OH. We reported in December the plant was on track for an “aggressive” May 2013 start date (see Columbiana County NGL Plant On Track for May Opening). The company building the plant, M3 Midstream (also known as Momentum), has revised the start date slightly to June.

Momentum’s construction coordinator Baron John gives an update on progress in building the plant, and offers a few examples of how far and wide the project has already impacted the local economy:

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