By Jeanine Prezioso
Oct 25 Dominion Resources Inc has entered
into a natural gas gathering service agreement in the Utica
Shale in Ohio, and continues to negotiate with producers for
other agreements, a sign of growing interest in infrastructure
to recover the area's rich oil and gas resources.
Its subsidiary Dominion East Ohio entered into a long-term
agreement with M3 Ohio Gathering (Momentum), a partner in the
Utica East Ohio Midstream LLC joint venture, that includes
Chesapeake Midstream Development, a subsidiary of Chesapeake
Energy Corp, and EV Energy Partners.
Dominion will gather 180 million cubic feet per day of gas
from wells committed to M3 Ohio and transport it to the
Kensington Processing Plant, presently under construction by
Utica East Ohio Midstream.
Chesapeake in March announced plans to build a large natural
gas processing hub in eastern Ohio.
The Kensington plant aims to process up to 800 million cubic
feet per day of gas and the bulk of supplies will be delivered
into Kinder Morgan Energy Partners Tennessee Gas
Dominion will use existing pipeline assets with limited
capital upgrades needed to support the project, Dominion Chief
Executive Thomas Farrell said during the company's third quarter
conference call on Thursday.
The project is due to come online in early 2014.
"Development of the Utica shale formation is proceeding, as
demonstrated by the leading indicators of announced well permits
and drilling activity," he said.
The Ohio Department of Natural Resources, through early
October, had issued 413 horizontal well permits to multiple
producers with 176 wells drilled to date and 35 of those wells
now producing. Twenty-four rigs are currently on location in
Ohio, Farrell said during the call.
The Utica Shale lies under the Marcellus Shale, which are
both part of the Appalachian Basin, the "longest producing
petroleum province in the United States," according to the U.S.
Geological Survey (USGS).
The basins are thick with horizontal rock formations that
hold substantial reserves of wet and dry gas trapped between the
The Utica Shale contains about 38 trillion cubic feet of
technically recoverable natural gas, the USGS said earlier this
Gas producers have descended on the area to recoup what they
expect to be hundreds of billions of dollars from developing the