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Caiman Energy, its Partners to Invest $800M in Utica
YOUNGSTOWN, Ohio -- More midstream infrastructure is on its way to eastern Ohio’s Utica Shale region as Caiman Energy II secures $800 million in investments to develop a natural gas liquid and crude oil gathering and processing network.
Caiman’s partners include Williams Partners of Tulsa, Okla., EnCap Flatrock Midstream of San Antonio and Highstar Capital of New York. The area of focus will be the natural gas liquid- and oil-rich areas of the Utica Shale in Ohio and northwest Pennsylvania, the company said.
In announcing the joint venture venture, Caiman did not narrow down where it would the build pipelines and plants, nor offer a timetable for site development and construction.
Caiman’s announcement follows news Monday that NiSource Inc., parent of Columbia Gas of Ohio, and Hilcorp Energy will invest $300 million to build a natural-gas liquids processing plant in northeast Ohio and another 50 miles of pipeline infrastructure in the Utica region (READ STORY).
Caiman, founded in 2009, built a rich gas system in West Virginia’s Marcellus shale region. In April the company sold substantially all of its Marcellus assets to Williams Partners for $2.5 billion. Caiman continued to do business as Caiman Energy II LLC.
“We’re very proud of the expansive system we built in the Marcellus and the great relationships Caiman developed with producers and the people of West Virginia,” said Caiman’s chairman and CEO, Jack Lafield, in a prepared statement. “The development of this vast, liquids-rich resource [in the Utica region] will require similar midstream infrastructure as we built out in the Marcellus.”
The CEO of Williams Partners, Alan Armstrong, said his company has “long experience in successfully constructing and reliably operating large-scale midstream infrastructure” and expects to leverage existing commercial relationships.
Caiman serves producers by providing natural gas and condensate gathering, compression, dehydration, measurement, treating and conditioning, processing, liquids transportation and fractionation services.
Caiman and NiSource join two other energy companies planning large midstream investments in the Utica region. Chesapeake Energy Corp. last month sold its midstream subsidiary to Global Infrastructure Partners for $2 billion, which is moving forward on Chesapeake’s intention to build a $900 million processing complex in Columbiana and Harrison counties (READ STORY).
In addition, MarkWest Energy of Denver is investing $500 million to build processing plants in Harrison and Noble counties.
BACKGROUND:
Midstream Gas Processors Poised to Transform Region
Midstream Processors Stake Huge Claims in Eastern Ohio
Copyright 2012 The Business Journal, Youngstown, Ohio.