Caimen Energy II and Williams Partners L.P. have announced a joint investment venture in Utica Shale infrastructure.
Management of the two companies anticipate an investment of $800 million. The investment will be used to develop natural gas, natural gas liquid (NGL), and crude oil gathering and processing infrastructure in Ohio and northwest Pennsylvania.
“This new midstream venture can leverage the commercial relationships and success of Caiman’s management and investors, along with Williams Partners’ long experience in successfully constructing and reliably operating large-scale midstream infrastructure,” said Alan Armstrong, chief executive officer of Williams Partners’ general partner.
“Our producer customers will benefit from introducing the kind of comprehensive large-scale midstream solutions to the area that will make their positions in the liquids- and oil-rich Utica Shale even more valuable,” Armstrong said.
Jack Lafield, chairman and chief executive officer of Caiman Energy, LLC, said, “We couldn’t be more pleased to work with such a well-respected company. Together with our other equity partners, Williams’ financial strength and experience allows Caiman Energy to continue to provide our producer customers with the best possible midstream solutions as they develop drilling locations in this exciting play. We see great opportunities in the Utica Shale and with the successful completion of this equity transaction, we believe we are well-positioned to expand into the Utica and elsewhere.”
The new Utica Shale joint venture will also benefit from close proximity to Williams Partners’ new Ohio Valley Midstream business. The Ohio Valley Midstream area of operation is northern West Virginia, southwestern Pennsylvania and eastern Ohio. Work is under way to expand existing physical assets, which include a gathering system and a processing facility. In addition, construction is underway on fractionation and additional processing facilities and there are plans to construct NGL pipelines.
The Utica Shale bed covers about 170,000 square miles, underlying the Marcellus Shale in some places. It runs from northeast Tennessee to southwestern New York and from central Ohio to eastern West Virginia, according to the U.S. Geological Survey.