Houston-based Crestwood Midstream Partners LP (NYSE: CMLP) has entered an agreement with Denver-based Antero Resources Appalachian Corp. to provide natural gas compression services on developing rich gas acreage in Doddridge County, W. Va.
The new seven-year compression services agreement will allow for Crestwood to construct, own and operate a compressor station on Antero's Western Area acreage, which is not dedicated to Crestwood under the existing 20-year gathering and compression agreement that covers the Eastern Area of Dedication. The new compression services agreement provides for fixed-fee compression services and minimum volume commitments similar to the existing Eastern AOD contract.
A new Western Area compressor station will be located, designed and installed by Crestwood as requested by Antero and in conjunction with their drilling and development program and the expansion of local gathering and processing infrastructure. The new agreement does not impact Crestwood's seven-year right of first offer to acquire midstream infrastructure from Antero in the Western Area and is in addition to the previously announced construction of two compressor stations, Morgan and Perkins, being constructed by Crestwood in the Eastern AOD during 2013.
The compressor station to be constructed under the new agreement will be the West Union Station, a two-phase project adding approximately 120 million cubic feet per day of flow capacity at an estimated cost of US $35 million which was included in Crestwood's previously announced 2013 capital guidance. West Union Phase I, which adds 55 million cubic feet per day of capacity, is expected to be in service in early 3Q 2013. West Union Phase II will add 65 million cubic feet per day of capacity and is expected to be in service by year-end 2013.
Crestwood Midstream Partners LP primarily engages in the gathering, processing, treating, compressing, transporting, and selling natural gas in the US. The company is headquartered in Houston.