Access Midstream to Boost Ohio Services - Analyst Blog

Access Midstream Partners LP ACMP announced infrastructure expansion plans at its Utica East Ohio ("UEO") midstream service facility in eastern Ohio. The UEO is a joint venture with Access Midstream holding a 49% interest while M3 Midstream LLC and EV Energy Partners, LP EVEP having 30% and 21% interest, respectively.

As per the expansion plan, the partnership will build a second processing train at the Leesville, Ohio facility and widen an existing high-pressure pipeline from UEO's Harrison Hub to Cardinal Gas Services' Archer Compression Facility, Harrison County. Moreover, the partnership will add downstream liquids interlinkages and propane as well as butane storage extensions to the Harrison Hub.

The strategic midstream expansion initiatives come on the heels of rising commitments from current prime customers like Chesapeake Energy Corp. CHK, Total Gas & Power North America, a business arm of Total SA TOT and Enervest Ltd. as well as from a new customer, American Energy - Utica, LLC, an associate of American Energy Partners, LP.

Fresh demand will likely augment UEO's throughput capacity by 70% from current commitment levels. The large-scale infrastructure additions will increase UEO's operational capacity to 1 billion cubic feet per day (bcf/d) and allow a processing capability of more than 1.1 bcf/d.

Access Midstream's developmental efforts came at an opportune time as the Utica formation is set to be a key contributor to the shale revolution in the U.S. Utica's vast resource potential has led the upstream firms to gear up their production activities.

This has led to increased demand for midstream services in the basin, which will boost Access Midstream's future growth prospects. To capitalize on the shale boom, the partnership has focused its capital spending in the Utica basin where it will invest around $1.8 billion by 2015.

Meanwhile, as per the ICF International report, North America shale production is expected to reach 6.3 millions of barrels of oil per day (Mbd) by 2035 which will further underscore the partnership's solid position as a midstream solutions provider in the industry. Currently, Access Midstream carries a Zacks Rank #3 (Hold).