Drilling Down

Williams Partners Invests in Pennant Midstream Systems

SPRINGFIELD TOWNSHIP, Ohio  — Three Rivers Midstream LLC, a subsidiary of Houston Williams Partners L.P., has joined Pennant Midstream LLC in a deal that would increase the footprint of that company nearly threefold in the Utica shale.

Pennant, a joint venture between Columbia Pipeline Group affiliate Columbia Midstream Group LLC and Hilcorp Energy Co.’s Harvest Pipeline Co., owns the Hickory Bend processing plant here. Pennant also owns a gas-gathering system that stretches from Columbiana County in Ohio through Lawrence and Mercer counties in western Pennsylvania.

Williams’ initial ownership stake would be 5%. However, the agreement calls for additional investments that would increase Williams’ position to 33.33% over a defined investment period.

“We are pleased to add Three Rivers Midstream as a high-quality partner to this joint venture,” said Columbia Pipeline Group President Glen Kettering in a statement. “Pennant leverages our extensive asset base and operating experience in the Utica shale region to create near-term value as well as long-term sustainable growth for our customers and shareholders.”

The agreement nearly triples Pennant’s acreage position in the Utica to 500,000 acres, “positioning Pennant to be a leading long-term midstream services provider in the Mahoning Valley,” according to a press release issued Monday.

“Three Rivers is a logical partner for Pennant,” said Brett Stovern, Pennant president. “The company’s extensive commercial and operations knowledge in the Appalachian Basin will further increase our leadership position over our Utica footprint. With strong processing, gathering and transport infrastructure in place, and the ability to significantly expand and leverage our asset position, we look forward to supporting further shale production in the Mahoning Valley.”

Since 2011, Pennant has invested more than $400 million in its Utica program. The company has constructed 41 miles of 12-, 20- and 24-inch wet gas gathering and high-pressure pipelines, a cryogenic plant in Mahoning County, a residue pipeline with dedicated deliveries to Dominion East Ohio and Kinder Morgan’s Tennessee Gas pipeline, and a 38-mile natural gas-liquids pipeline that runs from the Hickory Bend cryogenic plant to Utica East Ohio’s Kensington Plant in Columbiana County.

“The Hickory Bend system demonstrates many characteristics of infrastructure we want in our portfolio – new, large-scale, easily expandable and, importantly, highly efficient when it comes to NGL recovery and fuel consumption,” said Jim Scheel, Williams Partners senior vice president, Northeast G&P. “Additionally, by leveraging Pennant’s existing gathering and processing facilities, we’re able to serve customers in this area in a timelier manner than if we built our own facilities.”

Photo: Hickory Bend complex in Springfield Township, Ohio. Photo Copyright Marcellus Air.

Published by The Business Journal, Youngstown, Ohio.