May 21, 2012
/PRNewswire/ -- Penn Virginia Resource Partners, L.P. (NYSE: PVR) ("PVR") today announced that its midstream subsidiary has entered long-term agreements to extend its natural gas pipeline in
Lycoming County, Pennsylvania
and provide various gathering, compression and related services to four Marcellus Shale natural gas producers in northeast Pennsylvania. The agreements with a
Royal Dutch Shell
(NYSE: RDS.A) subsidiary, SWEPI LP, ("Shell"), affiliates of Southwestern Energy Company ("Southwestern") (NYSE: SWN), Range Resources Corporation ("Range") (NYSE: RRC), and privately-held Inflection Energy LLC ("Inflection"), are all fee-based with no direct commodity price risk.
William H. Shea, Jr.
, Chief Executive Officer of PVR's general partner, said, "We are extremely pleased to announce these fee-based producer agreements and our plans for the continued build-out of our
pipeline system. The further expansion of PVR's
system, ultimately with a connection to the Tennessee Gas Pipeline 300, will allow us to realize our long-term vision of providing our Marcellus producers with access to multiple gas markets and further expand our midstream business in the Marcellus Shale. We are gratified that, based on our demonstrated record of responsive and reliable performance, these recognized companies, all with a commitment to the long-term development of the Marcellus Shale, have entrusted us to meet their midstream service requirements."
"We believe that the continued development of our
system, together with our
system and the recently completed addition of Chief Gathering LLC's midstream assets, position PVR as the midstream service provider of choice in six of the most prolific counties in the Marcellus Shale region in northeast
," concluded Mr. Shea.
Under the agreements with Southwestern, Shell and Range, PVR will extend its existing 30-inch trunkline approximately 19 miles north through
Tioga County, Pennsylvania
. Construction of Phase III of the trunkline is expected to begin within two weeks and be completed in the fourth quarter of 2012. PVR will also construct lateral pipelines for Shell and Range to bring gas from the wellheads to the trunkline for transport to the Transcontinental Pipeline ("Transco") and, by early 2014, to the Tennessee Gas Pipeline 300 ("TGP").
The 15-year agreement with Southwestern provides for a firm take-or-pay capacity commitment in years two through eight, with an option to increase that commitment during this period. The agreement also provides Southwestern with interruptible capacity subject to availability.