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Wednesday, November 13, 2013

MarkWest Reports Third Quarter Results, Utica Shale Update

From a MarkWest press release:
Utica:
  • In August 2013, MarkWest Utica EMG announced plans to install a 38,000 (Bbl/d) de-ethanization facility at the Seneca complex in Noble County, Ohio.
  • In August 2013, MarkWest Utica EMG announced plans to form a Joint Venture (JV) with Kinder Morgan Energy Partners, LP (NYSE: KMP) (Kinder Morgan) to pursue three critical new projects to support producers in the Utica and Marcellus Shales. The JV would develop a processing complex in Tuscarawas County, Ohio with an initial capacity of 200 MMcf/d and a 150,000 Bbl/d NGL pipeline to transport ethane and heavier natural gas liquids to JV fractionation facilities in Mt. Belvieu. In November 2013, MarkWest Utica EMG and Kinder Morgan announced a binding open season to solicit commitments for the NGL pipeline project.
  • In November 2013, MarkWest Utica EMG announced it commenced operations of Seneca I, a 200 MMcf/d cryogenic processing facility in Noble County, Ohio. Seneca I is supported by long-term fee-based agreements with Antero Resources Corporation, Gulfport Energy Corporation (NASDAQ: GPOR), Rex Energy Corporation (NASDAQ: REXX), PDC Energy (NASDAQ: PDCE) and others.
And further:
Operating Results 
  • Operating income before items not allocated to segments for the three months ended September 30, 2013, was $181.9 million, an increase of $37.9 million when compared to segment operating income of $144.0 million over the same period in 2012. This increase was primarily attributable to higher processing volumes. Processed volumes continued to increase in the third quarter of 2013, growing approximately 57 percent when compared to the third quarter of 2012, primarily due to the Partnership’s Marcellus and Southwest segments. While the Partnership continued to increase its operating income and volumes, it experienced several operational constraints during the third quarter of 2013. Due to these considerations, operating income was lower than expected by approximately $14 million. 
  • The Partnership’s producer customers’ highly successful drilling programs throughout the Marcellus and Utica have resulted in a dramatic increase in natural gas liquids (NGLs) production. As a result, liquids production throughout the region has surpassed the capacity of the Partnership’s 60,000 Bbl/d Houston fractionator in Washington County, Pennsylvania and its 24,000 Bbl/d Siloam fractionator in South Shore, Kentucky. In January 2014, the Partnership and MarkWest Utica EMG, a joint venture between the Partnership and the Energy & Minerals Group, expect to commence operations of the Hopedale fractionation and marketing complex in Harrison County, Ohio. The complex will be connected via an NGL pipeline to the Partnership’s Marcellus infrastructure and will alleviate the current constraints associated with the production of purity products. However, in the interim the Partnership has made arrangements for continued fractionation services for its producer customer’s excess volumes through third-party facilities. As part of these arrangements, the Partnership has incurred, and until the end of the year, will continue to incur additional transportation costs and realize lower fractionation income.
Read the whole press release here.


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