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Thursday, June 14, 2012

Chesapeake's Midstream Sale Not Affecting Columbiana/Harrison Processing Plant Plans

From Business Journal Daily:

Chesapeake Energy Corp.’s $4 billion deal to sell its pipeline interests isn’t likely to derail plans to build a natural gas processing network in the Utica shale of eastern Ohio, executives say. 
“There doesn’t appear to be any change in their plans,” says George Passela, executive vice president and CFO of M3 Midstream/Momentum, Houston, Texas. Passela is referring to Chesapeake’s agreement, announced June 8 hours before its turbulent annual shareholders meeting, to sell its subsidiaries, Chesapeake Midstream Partners LP and Chesapeake Midstream Development LP, to Global Infrastructure Partners for $4 billion. 
“We are moving rapidly to the point where we will begin construction. I think we anticipate that will kick off in August,” Passela says. 
Chesapeake, Momentum and EV Energy Partners announced in March the formation of a joint venture to construct two processing plants in Columbiana and Harrison counties at a cost of $900 million. The Columbiana project, planned for a site in Kensington just across the Carroll County border, would be a processing plant that separates dry gas from natural gas liquids. The liquid gas would then be piped to the proposed Harrison County fractionation complex, which would separate the wet gas into specific products such as ethane, propane and butane. 
“We’ve acquired several parcels of land, and we are obtaining the necessary permits to begin construction,” Passela reports. 
Passela confirms that the Utica shale processing system is among the assets included in the sale of Chesapeake Midstream Development LP to Global. Under the terms of the proposed sale, there is a 45-day exclusive negotiating period and a 45-day extension period if the parties agree on a purchase price they’ve made progress toward closing the deal.

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