From the Associated Press:
Dominion Resources Inc. is forming a $1.5 billion joint venture with natural gas company Caiman Energy II to provide services to gas producers working in the gas-rich Utica shale in Ohio and Pennsylvania.
The Richmond, Va.-based energy company said Thursday that the partnership, called Blue Racer Midstream, will help companies gather, process, transport and sell natural gas liquids.
Dominion and Caiman, which is based in Dallas, expect to close on the joint venture by the end of the year.
Dominion is contributing pipelines and other equipment, while Caiman provides funds.
Dominion is one of the nation's largest producers and transporters of energy.
Caiman focuses on natural gas infrastructure. It's backed by natural gas pipelines company Williams Partners and investment firms.
Here's more info from the PR Wire:
The joint venture, Blue Racer Midstream, LLC, will be an equal partnership between Dominion and Caiman, with Dominion contributing midstream assets and Caiman contributing private equity capital. The joint venture will leverage Dominion's existing presence in the Utica with significant additional new capacity designed to meet producer needs as the Utica shale acreage is developed. Midstream services offered will include gathering, processing, fractionation, and natural gas liquids transportation and marketing.
"The Utica shale has enormous potential to provide jobs and revenues for the local Ohio economy," said Thomas F. Farrell II, Dominion's chairman, president and chief executive officer. "Because the portion of the Utica shale targeted today produces a rich gas stream, gathering and processing capacity must be developed so that the natural gas and valuable natural gas liquids can be separated and sold. Caiman Energy brings to the joint venture a proven track record in developing one-stop midstream shopping for producers.
"The joint venture allows Dominion to capture the value of our assets in the Utica region and supports our 5 percent to 6 percent annual operating earnings per share growth targets, while at the same time accelerating Utica midstream capital spending by up to $800 million," Farrell said. "This additional flexibility will be valuable as we proceed with our growth plan. Under the Utica joint venture, Dominion expects to benefit from cash received for its assets and pro-rata earnings from the joint venture."
"Dominion brings well-positioned assets and experienced operations for gathering, processing, fractionating and delivering natural gas and liquids produced from the Utica shale field," said Jack Lafield, Caiman's chairman and chief executive officer. "With our experience in developing midstream businesses and our $800 million in equity commitments for the joint venture, we can quickly leverage Dominion's assets, expertise and relationships to meet producers' needs as they fully develop their natural gas acreage."
Dominion facilities to be contributed to the joint venture include both gathering and processing assets. Dominion East Ohio's existing rich gas gathering network will be contributed, along with other portions of its gathering system as more lines are converted to rich gas gathering operations. With investment, the joint venture's gathering pipeline system could be expanded to transport at least 2 billion cubic feet of natural gas per day.
Also included are Dominion's Natrium Extraction Plant and related facilities, currently under construction in Marshall County, W. Va., and a Dominion Transmission pipeline connecting Natrium to the Dominion East Ohio gathering system.
Natrium is expected to process 200 million cubic feet of natural gas a day and fractionate 36,000 barrels of liquids, and can be expanded to serve market needs. Natrium is designed to separate the natural gas liquids into industrial-quality propane, butane, ethane and other products. The products will be able to reach multiple markets through a variety of delivery options, including truck, railroad, pipeline and barge facilities.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.