MarkWest Spending $300M+ This Year in WV Expansion Projects
MarkWest Energy, formerly a standalone company but bought out by MPLX (i.e. Marathon Petroleum) in December 2015, continues its aggressive expansion in the Marcellus/Utica. Particularly in West Virginia. MarkWest owns a number of processing plants in the Mountain State. This year, the company will spend $200 million to expand and upgrade its facilities in Doddridge County (Sherwood facility) to process natural gas and separate out ethane, and $110 million to expand and upgrade facilities in Marshall County (Majorsville facility) to process ethane. Folks, that’s nearly one-third of a BILLION dollars–in just two counties. Talk about economic stimulus! Last year MarkWest spent $120 million on upgrades in Wetzel County. MarkWest’s WV customers include: Antero, EQT, Southwestern, CNX, Chevron, Range Resources, and Eureka Hunter. Here’s more details on what to expect from the mighty MarkWest in WV this year…
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Marathon Petroleum subsidiary MarkWest Energy and Antero Resources’ midstream subsidiary Antero Midstream have announced a 50/50 joint venture focused on gathering and processing natural gas and natural gas liquids in northern West Virginia (Tyler, Wetzel and Richie counties). Antero Midstream will contribute its gathering operations for 195,000 acres in WV, boosting MarkWest’s total WV Marcellus gathering operation to a huge 360,000 acres. In addition, the JV will add three new processing plants to MarkWest’s Sherwood Complex in Doddridge County, WV. And get this: the JV contemplates building another eight (!) processing plants at Sherwood and a new/second location. Antero expects to invest “up to $800 million” through 2020, and has already made an initial $155 million investment. We think it’s no coincidence that on the same day Antero Midstream announced the deal (yesterday), they also announced a new round of units (i.e. shares of stock) they hope to pedal to raise $198 million. Here’s the details on the JV deal between Antero and MarkWest…
Marathon Petroleum, the refiner and midstream company based in Ohio (owner of what used to be MarkWest Energy) reported their fourth quarter and full year 2016 numbers yesterday. Overall revenue was down a bit, from $2.85 billion in 2015 to $2.21 billion in 2016 due to “a challenging commodity price and margin environment.” However, Speedway gas station/convenience stores (many of which used to be Hess gas stations) had “exceptional performance” and “set multiple records for the full-year 2016.” Of particular note for MDN, Marathon plans to spend $1-$1.3 billion in 2017 on new infrastructure projects in the Marcellus region. Good news indeed! Below we have yesterday’s update, along with a PowerPoint presentation Marathon used at the recent Marcellus-Utica Midstream event in Pittsburgh. We love the slides in that presentation, full of useful information…
We always find it distressing when companies begin to tap dance to please corporate raiders. That is apparently what is now happening at Marathon Petroleum, owner of MarkWest Energy. We don’t pretend to fully understand what’s happening (this is all high finance stuff), but our impression is that Marathon is “dropping down” certain assets (i.e. moved from one legal corporate entity to another) more quickly than it otherwise would have, due to pressure on the company from Elliott Management, a so-called activist investor in the company. “Activist investor” is what used to be called “corporate raider” 25 years ago, which are companies or people who invest just enough in a company to control it, forcing the company to shed assets and fire people in order to boost the stock price–just to turn around and sell and make a quick buck. Apparently Elliott wants Marathon to a) move assets around from one company to another PDQ, and b) consider spinning out Speedway into its own company, or selling it. Speedway, you may or may not know, is Marathon’s retail gas filling station business. Speedway bought out and merged in the old Hess filling stations (see 
Not even a year go–in December of last year–one of the biggest and brightest stars in the midstream firmament for the Marcellus/Utica, MarkWest Energy, sold itself to Marathon Petroleum (see 
This story reaches back just a bit, but we found it interesting and instructive. On Thursday, Sept. 29, MarkWest Energy gave a tour of its facilities in eastern Ohio. Ethane was one of the big topics of discussion. During that discussion, MarkWest’s vice president of operations, Dave Ledonne, said this about the announced Shell and hopefully soon-to-be announced PTT Global ethane cracker plants: “The cracker plants are the end game. They are what we really need.” What did he mean?…
MPLX, Marathon Petroleum Corp.’s fuels processing, transportation and logistics subsidiary, issued its third quarter 2016 update yesterday. MPLX reported that profits more than tripled, to $141 million, in 3Q16. MPLX is the owner of MarkWest Energy after buying them out late last year. One of the keys to MPLX’s increase in profits? Yep–the Marcellus/Utica. On an analyst phone call yesterday, MPLX’s president Don Templin said: “While other basins are in decline the Marcellus and Utica rich gas volumes continue to grow. For 2016 we continue to expect processed volumes to increase by approximately 15% year-over-year and gathered volumes to increase by approximately 20%. And in 2017, we expect an additional 10% to 15% increase in processed volumes compared to 2016.” Here’s the MPLX 3Q16 update…
Last week MDN reported that electric company FirstEnergy has begun construction of a new electric substation in Washington County, PA to provide electricity to “support two natural gas processing facilities being developed in the area” (see 
Marathon Petroleum, which purchased midstream company MarkWest Energy last year, continues to grow and expand–because of the Utica Shale. Marathon operates a refinery in Canton, OH that processes crude oil. Question: Did you know that 25% of the crude oil being processed at the Marathon refinery comes from the Utica Shale? No, we didn’t know that either! Marathon has made some big bets on the Utica. In fact, over the past two years, they’ve bet more than $1 billion on the Utica…
Over the years, MarkWest Energy, now a part of MPLX, has built a number of natural gas processing plants in Wetzel County, WV, collectively called the Mobley plant. In September 2014 MarkWest signed a contract with paving and construction company J.F. Allen to design and build a retaining wall so MarkWest could then build the Mobley V plant (in Smithfield). MarkWest says, in a lawsuit they’ve filed against J.F. Allen and other subcontractors, that they didn’t do the job right and it resulted in long delays and millions of dollars in extra costs for MarkWest. Which MarkWest is now trying to recover, requesting a jury trial…
In December of last year, one of the biggest and brightest stars in the midstream firmament for the Marcellus/Utica, MarkWest Energy, sold itself to Marathon Petroleum (see