The JV is intended to support Gulfport’s dry gas Utica Shale development in eastern Belmont County and Monroe County, Ohio.
Under the terms of the deal, the JV will develop a 1.8 MMDth/d dry gas gathering system comprising approximately 165 miles of high; and low pressure gathering pipelines with multiple interconnections to interstate pipelines including Rockies Express, ET Rover, TETCO and Dominion East Ohio.
The JV will also build approximately 50,000 horsepower of compression for gathering and delivery into various downstream interstate pipelines as well as a fresh water distribution system to deliver fresh water to pads for completion activities
Rice will provide construction and operating services for these assets while Gulfport will dedicate approximately 77,000 leasehold acres. The JV, which will be 25% owned by Gulfport and 75% by Rice, will be backed by long-term, fee-based service agreements with Gulfport.
Gulfport is also expected to contribute an existing 11-mile gas gathering pipeline and a 350 MDth/d TETCO interconnect, which are both located in Monroe County to the JV.
The assets are planned to be developed over six-year period and will be funded equally by each partner.
Construction of the system is planned to be commence immediately while the deliveries are scheduled to start in the middle of 2016.
Gulfport will have the participation right on a proportionate basis in any direct or indirect sale transactions by Rice.
Gulfport CEO and president Michael Moore said: "The JV will enable Gulfport to leverage Rice’s expertise as a midstream services provider and participate in the midstream value chain through accretive opportunities with clearly defined tag-along rights that will allow Gulfport to take part in the potential drop down strategies for the joint venture and its investments."
