NiSource Gas Transmission and Storage and its subsidiaries have entered into an agreement with Hilcorp Energy Company, to form a joint venture to develop the hydrocarbon potential in the Utica-Point Pleasant Shale formation in north-east Ohio and western Pennsylvania.
As per the deal, the joint venture, named Pennant Midstream, will construct a gathering pipeline infrastructure and natural gas liquids (NGL) processing facilities.
The first phase of the venture's investment will amount to about $300m and is slated to begin by the end of the year.
This phase will see the building of an initial 50-mile wet gas gathering pipeline in north-east Ohio and western Pennsylvania, which will handle 400 million cubic feet of gas per day including a natural gas processing complex with capacity of 200 million cubic feet of gas per day.
NiSource CEO and executive vice president Jimmy D Staton said, "This partnership demonstrates that NiSource is well-positioned and committed to providing the midstream services required by producers across the liquids-rich eastern Ohio and western Pennsylvania Utica Shale play."
The gathering system and processing complex, to be operated by NiSource Midstream Services, is expected to be online by the third quarter of 2013.
Pennant is also reviewing various options with several parties for fractionation, including development of its own facility.
Under the deal, NiSource will participate in a separate joint venture with Hilcorp to contribute its leasehold acreage in northeast Ohio with the current properties of Hilcorp.
Image: Pennant Midstream will develop the oil and gas potential in the Utica-Point Pleasant Shale formation in north-east Ohio and western Pennsylvania. Photo: Michael C. Rygel.