PVR Partners L.P.
) continues to strengthen its strategic alliance with
). Currently, the partnership has entered into an agreement with
Hess Corp. to provide trunkline plus gathering and compression
services. This project is expected to be online by the end of
2014. The estimated expenditure for this project will be in the
range of $125-$150 million.
Per the agreement, PVR Partners will install a 45-mile natural
gas trunkline with a diameter of minimum 20 inch. The partnership
will also set up allied gathering pipelines and facilities at
Hess Corp.'s lean gas production facility in eastern Ohio's Utica
Shale. The trunkline will carry 450 million cubic feet of lean
gas per day. The trunkline will initially connect with the Texas
Eastern and Rockies Express interstate pipelines and subsequently
connect with other interstate systems.
The new pipelines will cover Belmont, Jefferson and Harrison
Counties, where Hess Corp. enjoys a considerable acreage
position. Later, PVR Partners will own and operate the natural
gas trunkline and related facilities. In addition, the
partnership will also build gathering pipelines, compression
stations, dehydration facilities and other associated facilities
in the Utica Shale.
Initially, PVR Partners will provide services to Hess Corp.
Later, the partnership intends to sign more contracts with
several producers to provide capacity and gathering services.
In the current contract, PVR Partners will get service charges
from Hess Corp. against providing these facilities. The fees will
be calculated on the basis of volumes, thus ensuring steady
revenue flow to the partnership, without commodity price risks.
Installation of a number of new pipelines will allow PVR Partners
to strengthen its presence in the region and serve customers in a
better way, which will subsequently increase the number of
contract-awards while improving top line, going forward.
PVR Partners currently has a Zacks Rank #3 (Hold). However, other
stocks from the industry that are presently performing well
) with a Zacks Rank#1(Strong Buy), and
) with a Zacks Rank #2 (Buy).
Radnor, Pa.-based PVR Partners owns and operates a string of
natural gas midstream pipeline systems and processing plants and
is also involved in the management of coal as well as natural gas
HESS CORP (HES): Free Stock Analysis Report
OILTANKING PTNR (OILT): Free Stock Analysis
PVR PARTNERS LP (PVR): Free Stock Analysis
SEMGROUP CORP-A (SEMG): Free Stock Analysis
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