MarkWest sees Marcellus processing delays

OREANDA-NEWS. November 06, 2015. US midstream operator MarkWest has delayed the start date for some of its gas processing plants in the Marcellus region, citing downstream pipeline delays.

MarkWest's operating schedule for its planned 200mn cf/d Fox I gas processing plant, which includes a 20,000 b/d de-ethanization unit, and its 200mn cf/d Majorsville VII plant in western Pennsylvania, are now pushed back from the fourth quarter of 2016 to the first quarter of 2017. In West Virginia, its 200mn cf/d Mobley gas processing plant and associated 10,000 b/d de-ethanization unit is now expected to come online in the first quarter of 2016 rather than the end of this year.

The delays stem from the scheduling of downstream gas pipelines needed by customers, Semple said.

"They're very much dependent on the commodity price environment and the timing of the pipeline projects I mentioned earlier on both gas and liquids," he added.

MarkWest completed an 80mn cf/d expansion of its Carthage IV gas processing plant in east Texas in October, bringing the total capacity of the facility to 600mn cf/d.

MarkWest, the largest gas processor in the Marcellus and Utica shales, confirmed some producers in the region scaled back rich gas drilling this year as the costs of getting the liquids to market made dry gas development more economic. Additional regional NGL takeaway capacity, including an expanded LPG/ethane export terminal, will eventually bolster prices and more closely align them with higher values at the hub in Mont Belvieu, Texas, Semple said.

"If we were trading at Belvieu today in the northeast, the producers would be making very different decisions relative to the continuation of rich gas development," Semple said. "Mont Belvieu is a key index, no doubt about, it but even if Mont Belvieu stays flat for the next several years, we are working to get better netbacks" for producers in the area.

Third quarter sales fell 22pc year-over-year due to lower commodity prices. MarkWest saw fractionation volumes in the Utica shale more than double from last year to 42,200 b/d and Marcellus shale fractionation volumes rose 25pc from 2014 to 198,000 b/d in the third quarter.

In July MarkWest announced it would merge with Marathon's pipeline partnership, MPLX, giving Marathon access to Markwest's liquids pipelines and processing facilities throughout the Marcellus and Utica regions.