General Partner of Summit Midstream Partners, LP Exercises Option to Acquire 40.0% Interest in Ohio Gathering Joint Venture With MarkWest Utica EMG in Utica Shale
Jun 02, 2014
Summit Midstream Partners, LLC (“Summit Investments”), the privately held company that owns and controls the general partner of Summit Midstream Partners, LP (NYSE: SMLP), and MarkWest Energy Partners, L.P. (NYSE: MWE) (“MarkWest”) announced today that a subsidiary of Summit Investments has exercised its option to acquire a 40.0% equity interest in Ohio Gathering Company, L.L.C. and Ohio Condensate Company, L.L.C. (together, “Ohio Gathering”) from affiliates of MarkWest and The Energy & Minerals Group (“EMG”). In connection with the exercise of this option, Summit Investments reimbursed MarkWest and EMG approximately $377.0 million, which represents 40.0% of all Ohio Gathering capital contributions made to date.
Ohio Gathering owns, operates and is developing significant midstream infrastructure in the southern core of the Utica Shale in southeastern Ohio, including, Harrison, Guernsey, Belmont, Noble and Monroe counties. The midstream infrastructure currently in service and under development includes a liquids-rich gas gathering system and a separate dry gas gathering system, as well as a condensate transportation, storage and stabilization facility. Ohio Gathering’s liquids-rich gathering system serves as a critical inlet to MarkWest Utica EMG, LLC’s Cadiz and Seneca processing complexes, the largest integrated processing and fractionation system in the Utica Shale.
Through this joint venture, Summit Investments, MarkWest, and EMG expect to develop over $3.0 billion of natural gas gathering and condensate stabilization infrastructure for its customers. Ohio Gathering is currently gathering approximately 181 million cubic feet per day on behalf of Gulfport Energy Corporation, Rex Energy Corporation, and PDC Energy, Inc. under long-term, fee-based gathering agreements.
Steve Newby, President & Chief Executive Officer of Summit Investments, commented, “This acquisition, coupled with our 40.0% share of future Ohio Gathering development capital expenditures, represents the largest transaction ever by the Summit enterprise. Our team is excited about increasing Summit’s interests in Ohio Gathering and partnering with MarkWest and EMG, two first-class organizations, to develop this strategically important natural gas gathering and condensate stabilization infrastructure in the core of the Utica Shale. We expect that as Ohio Gathering is further developed, it will drive tremendous growth for the Summit enterprise over the next several years.”
Frank Semple, Chairman, President & Chief Executive Officer of MarkWest, commented, “We are very excited to continue building on our strong relationship with Summit and welcome them as a partner in the Utica. The Ohio Gathering joint venture is a critical component of MarkWest and EMG’s fully integrated midstream system in the Utica Shale. Summit has successfully proven their gathering expertise in the Marcellus and we are confident in their ability to support our development in the Utica.”