MERRILLVILLE, Ind., July 9, 2012 /PRNewswire/ -- NiSource Inc.'s (NYSE: NI) Midstream & Minerals Group, LLC, today announced a joint venture with affiliates of Hilcorp Energy Company ("Hilcorp"), a privately owned oil and gas exploration and development company based in Houston, Texas, to construct new gathering pipeline infrastructure and natural gas liquids (NGL) processing facilities to support natural gas production in the Utica Shale region of northeast Ohio and western Pennsylvania. The first phase of the venture's investment program, amounting to approximately $300 million, is planned for later this year.
As part of the agreement, NiSource also announced that it will participate in a separate joint venture with Hilcorp to develop the hydrocarbon potential on a significant combined acreage block in the Utica/Point Pleasant Shale formation in northeast Ohio and western Pennsylvania. NiSource will participate in the joint venture as a non-operating working interest owner in the total acreage position. Hilcorp will serve as operator and manage the development of the combined acreage.
"This joint venture, involving one of America's most respected and successful independent energy production firms, leverages NiSource's 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," NiSource President and CEO Robert C. Skaggs, Jr. said. "This is a tangible example of the various upstream and midstream growth options available to NiSource across the shale energy region. We will continue to build our inventory of growth and investment projects as development and delineation of the shale play unfolds."
Supplying Critical Utica Pipeline and Processing InfrastructureThe newly named midstream joint venture, Pennant Midstream, LLC, will initially invest in the construction of 50 miles of 20-inch gathering pipeline facilities in northeast Ohio and western Pennsylvania. In addition, Pennant will invest in the construction and installation of a cryogenic NGL processing plant in Ohio with initial capacity of 200 million cubic feet (mcf) per day. NiSource Midstream Services, LLC, will operate the system, which is expected to initially provide approximately 400 mcf per day of both wet and dry gas gathering, with significant anticipated expansion opportunities based on production activity in the area. The Hilcorp/NiSource upstream joint venture will anchor the project with a long-term gathering and processing agreement, while additional capacity will be marketed to other active producers in the area. The project is expected to be in service by the third quarter of 2013. Pennant is also reviewing multiple downstream NGL options with several parties, including the development of its own fractionation facilities.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV