Penn Virginia Resource Partners (PVR) said it will acquire Chief Gathering for $1bn.
Chief Gathering, owned by Chief E&D Holdings, is a midstream pipeline company with operating assets serving Marcellus Shale natural gas producers primarily in northeastern Pennsylvania, US.
This transaction, when closed in the second quarter of 2012, will result in a major expansion of PVR’s pipeline systems in the gas-rich Marcellus Shale.
PVR’s general partner chief executive officer William H. Shea, Jr. said the company expects that by year-end 2013 its midstream business unit will account for almost 75% of PVR’s EBITDA, up from 40-45% today.
"We are also pleased that Chief, one of the premier E&P companies in the country, and Riverstone Holdings, LLC, a private equity firm with a proven record of success in the energy industry, will be significant owners of PVR units following the acquisition," added William.
Chief Gathering’s assets include six natural gas gathering systems serving over 300,000 acres in Bradford, Lycoming, Sullivan, Susquehanna, Wyoming and Greene Counties, Pennsylvania and Preston County, West Virginia.
Chief Gathering is also constructing a new 750 MMcfd trunkline, anticipated to be in service in the third quarter of 2012, extending from northern Wyoming County to Luzerne County with a connection to Transco’s interstate pipeline.
PVR currently owns two gathering systems in Lycoming and Wyoming Counties, with a third system in early stage development in Susquehanna County.