Crestwood to build natural gas gathering system in the US

Crestwood Midstream Partners has signed a memorandum of understanding with Mountaineer Keystone to build a natural gas gathering system in West Virginia in the US.

The 42-mile natural gas pipeline will serve Mountaineer Keystone’s Marcellus Shale development programme in the northeast region of the state.

The Tygart Valley Pipeline (TVP) project, which is expected to be completed by the fourth quarter of 2012, will provide access to the natural gas markets in the Washington DC and Baltimore areas.

The $70m pipeline will have a capacity of about 200 million cubic feet a day (mmcf/d) and can also be expanded to about 300mmcf/d with compression. The pipeline will connect into Columbia Gas Transmission’s WB Pipeline in West Virginia’s Randolph County.

Mountaineer Keystone, a portfolio company of private investment firm First Reserve, will reserve firm capacity of about 115mmcf/d under a long-term contract.

Crestwood is now marketing the remaining capacity in the project to other producers in the area while Mountaineer Keystone will start its horizontal drilling programme in Barbour, Preston and Taylor Counties in West Virginia in the middle of 2012.

Crestwood general partner president and CEO Robert Phillips said the company looks forward to working with Mountaineer Keystone to develop this pipeline project, as well as additional upstream gathering and other midstream services needed in the area.

"The TVP project will be well received by other producers in the area that have expressed the need for infrastructure to support their planned Marcellus development programmes," Phillips said.

Crestwood owns and operates gathering, processing, treating and compression assets, servicing natural gas producers in the Barnett Shale, the Fayetteville Shale, the Haynesville / Bossier Shale, the Granite Wash and the Avalon Shale areas in the US.