Williams, Shell joint venture for processing plant

Posted April 12, 2013

Paul J. Gough
Digital Producer- Pi´╗┐ttsburgh Business Times

Shell and Williams Partners have announced a midstream joint venture to serve natural gas production companies in the Marcellus and Utica shales and build a system that would connect to the proposed ethane cracker in Beaver County.

Three Rivers Midstream, as it's called, would be mostly owned at first by Williams Partners (NYSE: WPZ) with an initial $150 million capital investment. Shell, which has not yet made a decision whether to build the cracker in Potter Township near Monaca, could increase its investment before mid-2015 when a cryogenic gas processing facility with capacity of 200 million cubic feet per day would be up and running.

That plant, whose location has not yet been announced, would benefit from what Williams called a long-term, fee-based dedicated gathering and processing agreement with Shell for production that includes 275,000 acres that Shell has here. It also would work with the Bluegrass Pipeline to deliver natural gas from Pennsylvania to the Gulf Coast and overseas beginning in 2015, a project from Williams and Boardwalk Pipeline Partners LP, as well as the Shell cracker.

“This new joint venture builds on our strategy of creating large-scale infrastructure solutions that will provide Shell and other producers with access to the best markets for their natural gas and natural gas liquids, whether they be in the Northeast or the Gulf Coast,” Alan Armstrong, chief executive officer of Williams Partners’ general partner, said in a prepared statement.