Williams Partners, Shell Create Midstream Joint Venture to Serve Shell and Other Producers


Williams Partners, Shell Create Midstream Joint Venture to Serve Shell and Other Producers

  • Three Rivers Midstream to Serve Shell, Other Producers in Wet-Gas Area of Marcellus, Utica Shale

  • Would Support Development of the Petrochemical Market in the Northeast

  • New Venture Has Long-Term Fee-Based Dedicated Gathering, Processing Agreement for Shell's Production in Area; Plans to Build Large-Scale Gas Processing Complex

  • New Processing Facility Would Have Access to NGL Fractionation, NGL Connections to Shell's Proposed Petrochemical Facility, and the Bluegrass Pipeline JV

TULSA, Okla.--(BUSINESS WIRE)-- Williams Partners L.P. (NYS: WPZ) announced today that it has agreed to launch a new midstream joint venture with Shell to provide gas gathering and gas processing services for production located in Northwest Pennsylvania. The venture will invest in both wet-gas handling infrastructure and dry gas infrastructure serving Marcellus and Utica Shale wells in the area.

The new venture, Three Rivers Midstream, has signed a long-term fee-based dedicated gathering and processing agreement for Shell's production in the area, including approximately 275,000 dedicated acres. The joint venture also plans to pursue gathering and processing agreements with other producers in the liquids-rich areas of Northeast Ohio in addition to Northwest Pennsylvania.

Three Rivers plans to construct a 200 million cubic feet per day (MMcf/d) cryogenic gas processing plant and related facilities. The location will be determined at a later date. The planned large-scale gas processing complex would be expandable as Three Rivers' business grows. The initial plant is expected to be placed into service by second quarter 2015.

"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," said Alan Armstrong, chief executive officer of Williams Partners' general partner.

"The system is expected to be connected to two major proposed developments in Pennsylvania - Shell's proposed ethylene cracker (feasibility still being studied) in Beaver County and the proposed Williams - Boardwalk joint venture to develop the Bluegrass Pipeline system that would deliver Marcellus and Utica liquids to the rapidly expanding Gulf Coast and export markets. The proposed Bluegrass pipeline is targeting a late 2015 in-service date.

"Similar to our strategy of creating a significant supply hub in the dry gas area of northeast Pennsylvania, Three Rivers will create a major supply hub in northwest Pennsylvania, but with the added benefit of large-scale NGL pipeline infrastructure and expanded market options to support wet-gas production in this area," Armstrong said.

Joint Venture Ownership, Initial Capital Spending

Williams Partners will initially own substantially all of Three Rivers Midstream and operate the assets. Shell has the right to invest capital and increase its ownership prior to mid-2015.

Williams Partners' portion of initial capital expenditures on the Three Rivers plant, not including the gathering system, is expected to be approximately $150 million. Subsequent capital investment is expected as the joint venture's business and scale increases.

About Williams Partners L.P. (NYSE: WPZ)

Williams Partners L.P. is a leading diversified master limited partnership focused on natural gas transportation; gathering, treating, and processing; storage; natural gas liquid (NGL) fractionation; and oil transportation. The partnership owns interests in three major interstate natural gas pipelines that, combined, deliver 14 percent of the natural gas consumed in the United States. The partnership's gathering and processing assets include large-scale operations in the U.S. Rocky Mountains, both onshore and offshore along the Gulf of Mexico and a growing presence in the Marcellus and Utica shales. Williams (NYS: WMB) owns approximately 68 percent of Williams Partners, including the general-partner interest. More information is available at www.williamslp.com, where the partnership routinely posts important information.

Portions of this document may constitute "forward-looking statements" as defined by federal law. Although the partnership believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the "safe harbor" protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the partnership's annual reports filed with the Securities and Exchange Commission.

Williams Partners L.P.
Media Contact:
Keith Isbell, 918-573-7308
Investor Contacts:
John Porter, 918-573-0797
Sharna Reingold, 918-573-2078

KEYWORDS: United States North America Oklahoma Pennsylvania


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