Dominion Resources (NYSE:D) Engaged in Natural Gas Deal

Brian Hicks

Written By Brian Hicks

Posted October 29, 2012

Over in the Utica Shale region of Ohio, Dominion Resources (NYSE: D) entered a natural gas gathering service agreement with M3 Ohio Gathering.

M3 is a partner in the Utica East Ohio Midstream LLC joint venture; the venture includes Chesapeake Midstream Development, which is a subsidiary of Chesapeake Energy Corp. (NYSE: CHK), as well as EV Energy Partners (NASDAQ: EVEP).

Under the terms of the agreement, Reuters reports, Dominion will harvest 180 million cubic feet of gas per day from wells that are already committed to M3. The gas will be transported to the Kensington Processing Plant, which is currently being built by Utica East.

Once the Kensington plant is completed, it will process up to 800 million cubic feet of gas per day; the bulk of the supplies will be routed to Kinder Morgan Energy Partners Tennessee Gas Pipeline.

As for Dominion, the company will rely on existing assets with some limited upgrades. The whole project is set to begin operations early in 2014.

According to the USGS, the Utica Shale holds roughly 38 trillion cubic feet of technically recoverable natural gas, and the area is in hot demand by leading gas producers and developers.

Through early October, the Ohio Department of Natural Resources issued 413 horizontal well permits to various producers. Of that, 176 wells have been drilled, and 35 of them are already producing.

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