Chesapeake Energy Corp. continues to expand its presence in the Utica Shale region by partnering with two firms to build a complex that will process natural gas and natural gas liquids in eastern Ohio .
Chesapeake along with M3 Midstream and EV Energy Partners will invest approximately $900 million in the midstream services complex, Chesapeake said March 13.
The structure will include natural gas gathering and compression facilities constructed and operated by Chesapeake subsidiary Chesapeake Midstream Development as well as processing, natural gas liquids fractionation and loading and terminal facilities built and operated by Momentum.
The complex will be located in Columbiana County, a region where the company already has several drilling sites.
Chesapeake announced earlier in the year its plan to shift more production to liquids-rich shale fields as prices for dry gas continue to drop. Chesapeake currently has eight rigs operating in the Utica Shale and plans to have 20 by the end of the year, says company spokesman Pete Kenworthy.
Prices for dry gas, commonly used a heating source or power generation, recently hit 10-year lows, forcing gas producers to search for more lucrative opportunities with "wet gas."
Wet gas includes fuels rich in ethane, propane, and butane often used in plastics and chemical production.
Chesapeake Midstream affiliates will own 59% of the partnership, Momentum will own 33% and EV Energy will have an 8% stake.
Chesapeake Utica Shale joint-venture partner Total E&P USA Inc. has an option to participate in the project, which could reduce ownership of Chesapeake Midstream affiliates and EV Energy to 44% and 6% respectively.
Chesapeake expects the first cryogenic processing and fractionation plants will be in service by second-quarter 2013.