PVR Partners Announces $380 Million of Planned Marcellus Shale Pipeline Project Investments
Penn Virginia Resource Partners, L.P. (NYSE: PVR) today announced that its midstream subsidiary has entered long-term agreements to extend its natural gas pipeline in Lycoming County, Pennsylvania and provide various gathering, compression and related services to four Marcellus Shale natural gas producers in northeast Pennsylvania. The agreements with a Royal Dutch Shell (NYSE: RDS.A) subsidiary, SWEPI LP, affiliates of Southwestern Energy Company (NYSE: SWN), Range Resources Corporation (NYSE: RRC), and privately-held Inflection Energy LLC, are all fee-based with no direct commodity price risk.
Under the agreements with Southwestern, Shell and Range, PVR will extend its existing 30-inch trunkline approximately 19 miles north through Lycoming County and into Tioga County, Pennsylvania. Construction of Phase III of the trunkline is expected to begin within two weeks and be completed in the fourth quarter of 2012. PVR will also construct lateral pipelines for Shell and Range to bring gas from the wellheads to the trunkline for transport to the Transcontinental Pipeline ("Transco") and, by early 2014, to the Tennessee Gas Pipeline 300 ("TGP").
The 15-year agreement with Southwestern provides for a firm take-or-pay capacity commitment in years two through eight, with an option to increase that commitment during this period. The agreement also provides Southwestern with interruptible capacity subject to availability.
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