PVR Partners, L.P. (PVR) announced it has completed construction and begun full commercial operation of its newest natural gas trunkline serving Marcellus Shale producers in north-central Pennsylvania. The 30-mile long, 24-inch diameter, 750 million cubic-feet-per-day (MMcfd) capacity pipeline extends from northern Wyoming County southward to a new interconnection in Luzerne County with Transco's interstate pipeline system.
Commonly referred to as the "Wyoming Pipeline", the project was one of the assets under development by Chief Gathering LLC and acquired by PVR in May 2012. Funds required for the completion of the project were included in the financing executed at the time of the Chief Gathering acquisition.
PVR currently has agreements with five producers for firm and interruptible service on the Wyoming Pipeline, and anticipates entering agreements with additional producers. Consistent with PVR's other business in the Marcellus, all of the Wyoming pipeline producer agreements are entirely fee based and have no direct commodity price risk.
Bill Shea , President and CEO of PVR's general partner, said, "The Wyoming Pipeline was a critical component of PVR's acquisition of Chief Gathering, and the completion of the project ahead of schedule and on budget is an important milestone in the execution of our business plan in the Marcellus Shale region.
"Producers have contracted for initial firm transportation volumes totaling 255 MMcfd this year," continued Mr. Shea. "We expect initial Wyoming Pipeline volumes will exceed the firm committed 'take-or-pay' amounts. The existing volumes on our Susquehanna/ Wyoming gathering systems have been hampered by delivery constraints on the Tennessee Gas Pipeline 300 Line, and our ability to now deliver to Transco via the Wyoming Pipeline will increase volumes on the Susquehanna/ Wyoming gathering systems by over 20%. Volumes are also expected to increase as we continue build out of the Susquehanna/ Wyoming gathering systems and connect additional wells to deliver into the Wyoming Pipeline."