Williams Joins Columbia & Hilcorp in Pennant Midstream JV

joint ventureIt’s been a while since we’ve heard anything about Pennant Midstream, a joint venture between Columbia Pipeline Group and Hilcorp’s midstream subsidiary Harvest Pipeline Company with assets located mostly in the Mahoning Valley area of Ohio. Columbia, the lead jv partner, announced today that Williams (currently being bought out by Energy Transfer Equity) will become the third partner in the jv. Williams will have an initial 5% ownership share, although it’s not clear to us how much they’ve initially invested for that 5%. However, should Williams want to pony up cash for expansions to the system, they can achieve a full one-third ownership in time. Here’s the announcement with the details Columbia has decided to share…
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First Energy Completes New Power Line for Pennant Midstream in OH

FirstEnergy, an electric utility company operating in the northeast, announced yesterday they have completed the installation of 3.5 mile, 138 kilovolt (kV) transmission line in Mahoning County, OH that runs to the Pennant Midstream natural gas processing facility in Springfield Township. The new line cost $3 million and replaces “temporary equipment” (i.e., jury-rigged) installed previously so the Pennant plant could begin operations. The new line allows for future expansion at the facility. This is not the first shale-related project for FirstEnergy. Earlier this year FirstEnergy announced a $36 million electric substation for a MarkWest processing plant in WV (see FirstEnergy Builds Electric Substation for MarkWest WV Plant). Here’s the details for their latest project…
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Pennant Midstream Says Hickory Bend (OH) Cryo Plant Now Ready

Good news! Pennant Midstream announced yesterday that its Hickory Bend cryogenic processing plant in Mahoning County, OH is now live and online and ready to receive “wet gas” from the Utica Shale. You may recall Gov. John “foreigner hunter” Kasich dedicated the plant back in October (see OH Gov. Kasich Dedicates Hickory Bend Plant, No Foreigners Found). However, the $375 million plant was not quite ready at that point. It is now, and the gas will start flowing soon.

The even better news is that Pennant, a joint venture between Hilcorp Energy and NiSource, is preparing to build two more plants at the same location. Each plant can handle 200 million cubic feet of raw gas per day, separating it into methane and natural gas liquids (NGLs). The NGLs are then pipelined elsewhere for further processing. Here’s yesterday’s announcement:
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NiSource 3Q13: Income Doubled, Progress on NE Midstream Projects

NiSource, a huge midstream and utility company in the northeast/Midwest and parent of Columbia Gas, released their third quarter operations and financial update yesterday. They report income nearly doubled from a year ago (up 198%), and is on track to invest a massive $2 billion this year in upgrades and expansion projects. NiSource is a major midstream player in the Marcellus/Utica region through NiSource Midstream, Columbia Gas, Millennium Pipeline and Pennant Midstream–together what they consider their Columbia Pipeline Group (CPG).

Here’s relevant portions from yesterday’s update that concern the NiSource’s midstream operations in the Marcellus/Utica region:
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OH Gov. Kasich Dedicates Hickory Bend Plant, No Foreigners Found

Ohio Gov. John Kasich was on hand yesterday for a ceremonial ribbon cutting for the Hickory Bend cryogenic processing plant in Mahoning County, OH. Pennant Midstream, a joint venture of NiSource and Hilcorp’s Harvest Pipeline subsidiary, dedicated the plant by inviting Kasich and a number of state and local officials. The Hickory Bend processing plant separates natural gas liquids (NGLs or “wet gas”) from methane (or “dry gas”). It has been up and running since summer, however, it won’t begin shipping separated NGLs to the M3 Momentum fractionation plant in Kensington until December. Hickory Bend is also a network of 55 miles of wet gas gathering pipelines in the region.

Gov. Kasich had plenty to say as he dedicated the plant. In typical fashion he was there sniffing out “foreigners” and was happy to pronounce he didn’t find any. (For an example of Kasich’s obsession with “foreigners”–i.e. out of state workers–see OH Gov. Kasich Goes Foreigner-Hunting in Strasburg.) Kasich also dissed Pennsylvania in his comments. A handful of protesters were on hand for the ceremony, bleating about methane migration, but they were far enough away that nobody heard them…
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OH Hickory Bend Processing Plant Dedication in Oct, Online in Dec

NiSource and Hilcorp Energy are building a natural gas processing plant in Springfield Township (Mahoning County), OH as part of a joint venture called Pennant Midstream. The Hickory Bend Processing Plant, as it’s called, will be dedicated on Oct. 28, although it won’t actually be up and running until sometime in December. The Hickory Bend project includes not only the processing plant (the first of a potential three processing plants), it also includes some 55 miles of wet gas gathering pipelines in eastern OH.

The initial investment in Hickory Bend by NiSource and Hilcorp is $375 million, but by the time it’s all done and dusted (in several years’ time with more processing plants), it could easily top $1 billion…
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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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