The gathering system – to be named the Tygart Valley Pipeline (TVP) – is expected to be completed by the fourth quarter 2012 and will interconnect with Columbia Gas Transmission’s WB Pipeline in Randolph County, West Virginia.
The TVP will provide Mountaineer Keystone (MK) and other area producers with access to the growing natural gas markets in the Washington DC and Baltimore areas. Crestwood estimates the TVP project, as currently planned, will cost approximately $US70 million.
The TVP project will be anchored by a long-term contract with MK, a First Reserve portfolio company. First Reserve, a premier private investment firm in the energy industry, also manages the fund which owns Crestwood Holdings, the majority owner of Crestwood’s general partner. MK will commence its horizontal drilling programme in the Barbour, Preston and Taylor counties, West Virginia, in mid-2012.
The TVP, as currently designed, will have total capacity of approximately 200 MMcf/d which can be expanded to approximately 300 MMcf/d with compression. MK expects to reserve firm capacity of 115 MMcf/d under a long-term, fixed-fee gathering agreement.
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Crestwood is currently marketing the remaining firm capacity in the project to area producers that have been accumulating Marcellus Shale leases but have been slow to commence drilling and development due to a lack of pipeline infrastructure in the area.
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