HOUSTON--(BUSINESS WIRE)--Enterprise Products Partners L.P. (NYSE: EPD) and Chesapeake Energy Corporation (NYSE: CHK) today announced they have entered into a long-term contract whereby Chesapeake would anchor Enterprise’s proposed long-haul ethane pipeline from the Marcellus and Utica shale regions in Pennsylvania, West Virginia and Ohio to the U.S. Gulf Coast.
The approximately 1,230-mile pipeline would have an initial capacity of 125,000 barrels per day of ethane and could be quickly expanded through a combination of additional pumping horsepower and pipeline looping. The committed shipper transportation rate would range between 14.5 cents per gallon and 15.5 cents per gallon. Through connections at the partnership’s natural gas liquids (“NGL”) storage complex in Mont Belvieu, Texas, ethane production from the Marcellus and Utica shales would ultimately have direct or indirect access to every ethylene plant in the U.S. The pipeline could begin commercial operations in the first quarter of 2014.
“The addition of this new pipeline would provide producers in the quickly expanding Marcellus Shale play, as well as the emerging Utica Shale, with much-needed midstream infrastructure to facilitate production of NGL-rich natural gas and provide shippers with access to the highest value markets on the U.S. Gulf Coast for their ethane,” said Michael A. Creel, president and chief executive officer of Enterprise’s general partner. “We have also built facilities to serve the petrochemical industry on the Gulf Coast as it continues to expand its demand for price-advantaged domestic ethane to displace more expensive imported crude oil derivatives.”
James C. Johnson, Senior Vice President – Marketing for Chesapeake Energy Corporation added, “As the most active driller and largest lease holder in the Marcellus and Utica Shale plays, Chesapeake has committed to 75,000 barrels per day over a five-year ramp-up period to anchor this critical infrastructure and has the ability to secure additional capacity in the project. We view providing a major commitment in support of this project as an important step toward obtaining premium pricing for the significant volumes Chesapeake will produce from this resource.”
Requests for additional information regarding to the current binding open commitment period which continues until November 10, 2011 at 5 p.m. CST may be directed to Russ Kovin at email@example.com or (713) 381-7925.
Enterprise Products Partners L.P. is the largest publicly traded partnership and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals. EPD’s assets include approximately: 50,000 miles of onshore and offshore pipelines; 192 million barrels of storage capacity for NGLs, refined products and crude oil; and 27 billion cubic feet of natural gas storage capacity. Services include: natural gas transportation, gathering, processing and storage; NGL fractionation, transportation, storage, and import and export terminaling; crude oil and refined products storage, transportation and terminaling; offshore production platform; petrochemical transportation and storage; and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems and in the Gulf of Mexico. For additional information about Enterprise please visit www.enterpriseproducts.com.
Chesapeake Energy Corporation is the second-largest producer of natural gas, a Top 15 producer of oil and natural gas liquids and the most active driller of new wells in the U.S. Headquartered in Oklahoma City, the company's operations are focused on discovering and developing unconventional natural gas and oil fields onshore in the U.S. Chesapeake owns leading positions in the Barnett, Haynesville, Bossier, Marcellus and Pearsall natural gas shale plays and in the Granite Wash, Cleveland, Tonkawa, Mississippi Lime, Bone Spring, Avalon, Wolfcamp, Wolfberry, Eagle Ford, Niobrara, Three Forks/Bakken and Utica unconventional liquids plays. The company has also vertically integrated its operations and owns substantial midstream, compression, drilling, trucking, pressure pumping and other oilfield service assets directly and indirectly through its subsidiaries Chesapeake Midstream Development, L.P. and Chesapeake Oilfield Services, L.L.C. and its affiliate Chesapeake Midstream Partners, L.P. (NYSE:CHKM). Chesapeake’s stock is listed on the New York Stock Exchange under the symbol CHK. Further information is available at www.chk.com where Chesapeake routinely posts announcements, updates, events, investor information, presentations and press releases.