UGI said that it will acquire and construct facilities to handle up to 120,000 dekatherms per day.
The service is expected to begin as early as spring 2011, subject to permitting and regulatory approvals.
UGI Energy Services vice president of midstream assets and services Peter Terranova said that this is its first project to provide gas gathering infrastructure to Marcellus natural gas producers.
UGI had earlier said that it plans to invest approximately $300m over the next two years on midstream projects to support the development of natural gas infrastructure in the Marcellus Shale region.
Among these investments are the agreement between UGI Energy Services and NiSource Gas Transmission and Storage (NGT&S) to market and develop a major pipeline project to provide Marcellus Shale producers in Pennsylvania improved access to high-value markets.
