US based Rex Energy has signed a deal with Stonehenge Energy Resources II to build a natural gas gathering and compression system in Butler County, Pennsylvania.
The firms have signed an agreement through mutual affiliates R.E. Gas Development and Stonehenge Appalachia for the construction which is expected to enable natural gas transportation from the Moraine East development area in the US state.
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Stonehenge will be responsible for building the system within this year, which will transfer Rex’s production from the site.
Drilling for the site had been initiated during the first quarter of the year.
Initial construction of the system will include a 20-mile trunkline, multiple gathering lines and a compressor station.
System capacity will be initially kept at 400 MMcf/d, which can later be expanded to make room for further development at the site.
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By GlobalDataThe system will be connected to the Bluestone processing plant on the other side, which is owned and operated by a MarkWest Energy Partners subsidiary.
Rex Energy chief executive officer Tom Stabley said: "This agreement is a critical component of our development strategy for the Moraine East Area, and we are excited to once again be partnering with Stonehenge for these essential services.
"The initial gathering system will provide ample capacity for our 2015 and 2016 development programme, and the potential for expansion provides us with greater flexibility to support our future growth in the Moraine East Area."
Stonehenge president Chuck Wilkinson said: "This project allows Stonehenge to return to Butler County, again in support of the dominant producer in the area, Rex Energy.
"Work on the new midstream system is well underway, and we are focused on meeting the substantial production needs in this and subsequent years."
