MarkWest Unit Announces Contract with American Energy - Analyst Blog

A joint venture (JV) unit of MarkWest Energy Partners, L.P. (MWE) announced that it has entered into an agreement with an affiliate of American Energy Partners, LP involving the provision of natural gas gathering, processing and fractionation services.  

The MarkWest unit, MarkWest Utica EMG, L.L.C., will offer natural gas processing services at its Cadiz complex in Harrison County and the Seneca complex in Noble County in Ohio. These complexes provided production capacity of 725 million cubic feet per day to 8 producers operating in Utica. The combined processing capacity of these complexes is expected to be expanded to over 1.3 billion cubic feet per day by second quarter next year.  

MarkWest Utica would provide fractionation services for American Energy's natural gas liquids at the Hopedale complex. This complex currently has a fractionation capacity of 60,000 barrels per day (Bbl/d), which is expected to increase to 120,000 Bbl/d by the first quarter of next year.

Moreover, MarkWest Utica would provide purity ethane for American Energy, utilizing its 40,000 Bbl/d de-ethanization plant at the Cadiz complex.

Ohio Gathering Company, L.L.C., a JV unit of MarkWest Utica, is also a part of the agreement. The company would be providing natural gas gathering and compression services for American Energy. American Energy has dedicated over 60,000 net acres in the Utica shale area to MarkWest Utica and Ohio Gathering Company.

MarkWest Utica and Ohio Gathering Company also have long-term, fee-based contracts with other operators in the region like Antero Resources Corporation (AR), Gulfport Energy Corporation (GPOR), Rex Energy Corporation (REXX) and PDC Energy, Inc. (PDCE).

Denver, CO-based MarkWest Energy, a master limited partnership, is engaged in the gathering, processing and transmission of natural gas, transportation, fractionation and storage of NGLs as well as the gathering and transportation of crude oil. Currently, MarkWest Energy carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.