Regency and American Energy sign JV deal for Utica pipeline project

Regency Energy Partners (RGP) and American Energy-Midstream (AE-MidCo) have signed a joint venture (JV) agreement for a pipeline project in the US.

Under the deal, Regency Energy will construct and operate the Utica Ohio River project, estimated to cost $500m.

The project is expected to be completed in the third quarter of 2015 and will involve building a 52-mile, 36in gathering trunkline.

The trunkline will have the capacity to deliver about 2.1 billion cubic feet per day of natural gas to two interstate pipelines, which include the Rockies Express Pipeline and Texas Eastern Transmission on the southern end of the line.

The companies said they could increase the pipeline’s overall delivery to 3.5 billion cubic feet per day if the line is connected to another northern pipeline.

Plans also include the construction of 25,000 horsepower of compression at the Rockies Express interconnect.

Regency Energy will contribute 75% of the project development costs, while AE-MidCo will cover the remaining 25%.

RGP senior vice president of the eastern region Art Cantrell said: "We are excited about the strong growth potential of the Utica shale, and this project will be a main takeaway option for Utica development, providing interconnectivity with major interstate pipelines in 2015."

RGP and American Energy – Utica (AEU) will also sign an agreement for natural gas gathering in eastern Ohio.

Both the firms will contribute all earlier signed agreements to the JV.