Dallas-based Crosstex Energy LP is banking on Utica and Marcellus shale liquids. The midstream company, with 3,500 miles of pipeline and 10 processing facilities in five unconventional plays across Texas and Louisiana, planted its flag in Ohio and West Virginia last year with the acquisition of Clearfield Energy. Condensate is the target.

“Our immediate focus is to build out our capabilities around condensate,” says Paul Weissgarber, Crosstex senior vice president of the Ohio River Valley. “The rich-gas windows in the Utica and the Marcellus are proving to be quite prolific in the amount of condensate that's being produced.”

Clearfield was a 125-year-old legacy gatherer of Pennsylvania-grade shallow oil production in the Ohio River Valley. Crosstex coveted its assets that included a 200-mile crude pipeline through southern Ohio and northern West Virginia, storage facilities, a truck fleet, and a rail and barge terminal, seeing the opportunity to build on this platform to move growing Utica and Marcellus liquids production.

“We saw other midstream companies building gas-gathering assets, and the Clearfield acquisition gave us a tremendous platform to build off of the crude and condensate growth we see coming from this developing region.”

While continuing to transport Penn-grade crude, Crosstex sees condensate volumes growing as more shale wells come online. Weissgarber estimates at least 200 liquids-prone Utica wells are now producing, with another 200 completed and waiting on takeaway. By year-end, local refining markets could be saturated, he says.

“We're seeing a tsunami of liquids volume on the horizon. We're fast approaching the point in which the volumes will be out of balance with the local condensate markets.”

Producers too, he says, want the flexibility to take their condensate to markets outside of the area, and Crosstex is only too happy to oblige.

Crosstex currently utilizes a 110-strong truck fleet to move condensate in the region. It is adding 65,000 barrels of condensate storage at its Bells Run barge terminal near Marietta, Ohio, the mid-point of its pipeline. From here, volumes are barged to Gulf Coast refineries.

Additionally, the company re-activated a long-shuttered rail terminal near Frazeyburg, Ohio, building a state-of-the-art, 20-car rail rack. The Black Run terminal has the capacity to load 24,000 barrels of Utica liquids a day, with room to expand.

“We're the first to move Utica condensate by rail in an area where there is a lack of transloading capabilities,” he says. “This facility enables our producer customers an immediate midstream solution to export their condensate product and maximize value.”

Further expanding its capabilities, Crosstex has partnered with the former management of Enerven Compression Services to form E2 Energy Services, with a $75-million initial investment. E2 is building three natural gas compression and condensate stabilization facilities in Noble and Monroe counties, the first two to be operational by year-end. Together, the three facilities will be able to compress 300 million cubic feet of gas per day, and stabilize 16,000 barrels of condensate per day.

The facilities are anchored by volumes from Antero Resources, which has announced wells producing in excess of 1,300 barrels of condensate a day. “If you had hundreds of wells flowing 1,000-plus barrels a day, we'd be swimming in condensate,” Weissgarber says. And while he doesn't hold out that all wells will be such gushers, “our belief is there will be significant condensate that gets produced. We've been pleased with the wells we've seen so far.”

Current total condensate volumes produced in the Utica are approximately 15,000 barrels a day, he estimates. He anticipates volumes to triple within nine months, to approximately 50,000 barrels a day.

Crosstex has announced some $335 million of investments in the region, with more projects being considered. Weissgarber says plans to extend its pipeline northeast from Marietta through the heart of the wet-gas window are “front and center” on its agenda, as well as consideration of adding a condensate splitter and a freshwater service for hydraulic fracturing.

“We're eager to further build our position in the Marcellus and Utica,” he says. “We're enthusiastic about the potential, and see it as a key growth opportunity.”