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Blue Racer Midstream Lands Utica Customers
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DALLAS -- Blue Racer Midstream LLC, a joint venture between Dominion and Caiman Energy II, announced today that it has entered into long-term agreements with some of the leading oil and gas producers now operating in eastern Ohio's Utica shale.
Blue Racer reported that it has signed agreements with producers Chesapeake Energy Inc., Eclipse Resources, Hess Corp., Total Gas & Power North America, Rex Energy Corp. and EnerVest.
The midstream company will use its system to gather and process natural gas liquids produced by these energy companies, most of which are drilling in the southern portion of the Utica shale in Monroe, Belmont, Guernsey, Noble, Harrison and Carroll counties.
“It’s a very exciting time in the evolution of the Utica Shale," said Blue Racer CEO Jack Lafield. "The Utica is a complex play with tremendous potential. Utica producers face a number of challenges, and we continue to build out a very large 'super system' in the Utica to assist them."
Blue Racer’s integrated system of midstream assets is the largest system in the Utica, Lafield says.
"Our assets are positioned exactly where our producers need them so that ultimately they achieve the best possible price realizations.”
Blue Racer is building a new cryogenic processing complex in Berne, Ohio, in Monroe County, and is expanding its Natrium processing complex in West Virginia.
The Berne site is designated to accommodate three units, each capable of processing 200 million cubic feet of natural gas per day. The first of these units is slated for operation during the third quarter of 2014.
The Natrium expansion entails adding 200 million cubic feet capacity at that complex and is to be commissioned in March, the company said. Blue Racer's Natrium I plant has also returned to service after it was shut down because of a fire that damaged its system.
“We’re very excited to be partnering with Blue Racer for gathering, processing and fractionation services on a very significant portion of our Utica Shale assets,” said Benjamin Hulburt, president and CEO of Eclipse Resources. “Eclipse Resources is planning an aggressive drilling program on our 95,000-plus net acre position in the core of the Utica Shale play, where we plan to grow our operated rig count from three rigs currently to six rigs by year-end 2014
A 30-mile “Y-Grade” pipeline will carry processed liquids from the Berne complex to Blue Racer’s Natrium facility for fractionation. NGLs are currently transported from Natrium to downstream markets via rail, truck and pipeline. The addition of barging via the Ohio River is under development and will make the Natrium complex the only fractionation facility to offer barge service to Utica producers. Blue Racer’s ethane pipeline provides direct access to the Enterprise ATEX Pipeline. Additional pipeline access out of Natrium will provide connectivity to Sunoco’s Mariner East and Mariner West pipelines and Enterprise’s TEPPCO Pipeline. Blue Racer is actively pursuing interconnects to other long-haul NGL pipelines that are awaiting approval.
Blue Racer has also approved expansions of the natural gas markets accessible to the supersystem. In addition to existing interconnections with Dominion Transmission Inc. and Dominion East Ohio, Blue Racer is establishing new pipeline interconnections with Texas Eastern Transmission and has approved establishing an interconnection with Rockies Express Pipeline.
Published by The Business Journal, Youngstown, Ohio.
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