The joint venture of Denver, Colorado-based
MarkWest Energy Partners, L.P.
) and private-equity group The Energy & Minerals Group ("EMG")
- MarkWest Utica EMG, L.L.C. aka MarkWest Utica - has entered into
a definite service agreement with
Gulfport Energy Corporation
). The companies had signed the deal's Letter of Intent (LOI) in
Per the deal, MarkWest Utica will extend gathering, processing,
fractionation and marketing services to Gulfport for the
development of the liquids-rich corridor of the Utica. It also
includes the setting up of extensive natural gas gathering
infrastructure across Harrison, Guernsey, and Belmont counties.
These facilities are expected to be operational this year.
MarkWest Utica plans to process gas at its Harrison County
processing complex and render natural gas liquid (NGL)
fractionation and marketing services at the Harrison County
fractionator. The NGL purity products will be marketed by truck,
rail and pipeline from this unit that will be developed through
three phases and will come fully online in 2013.
The joint venture will likely have about 60 miles of gas
gathering pipelines and associated compression to transport the
Gulfport volumes by the end of 2012. The gathering pipelines
capacity will be expanded up to 140 miles by the first quarter of
Additionally, MarkWest Utica will build a second processing
complex in Noble County. This facility will be developed in two
steps and is slated to be completed in mid-2013.
Both Harrison and Noble processing complexes will be linked to
the Harrison fractionation complex that will again be connected
with the Houston fractionation plant.
The Harrison facility along with the Houston unit will form the
biggest fractionation complexes in the northeast that will offer
high-class operating flexibility and consistency, as well as market
MarkWest management remains optimistic about this collaboration
and expects to generate with high returns from the resource-rich
holdings in the southern Utica shale.
We remain bullish on MarkWest's performance in the coming
quarters based on its strong position in the midstream business,
achieved through a combination of organic efforts and accretive
acquisitions. We view MarkWest units as an attractive investment
and maintain our long-term Outperform recommendation on the
GULFPORT ENGY (GPOR): Free Stock Analysis
MARKWEST EGY PT (MWE): Free Stock Analysis
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