Atlas Pipeline And Williams Form Joint Venture

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Williams plans to enter the Marcellus Shale through a newly formed midstream joint venture with Atlas Pipeline Partners L.P.  The new venture will own Atlas Pipeline Partners’ existing Appalachian Basin gathering system, which includes approximately 1,800 miles of intrastate natural gas gathering lines servicing 6,900 wells. The system now has an average throughput in excess of 100 MMcf/d. The Marcellus production growth of Atlas Energy Resources, LLC, an Atlas Pipeline Partners affiliate, has driven a 30% increase in the gathering system’s throughput in the past year.
  Williams will contribute $102 million and issue a $25.5 million note payable to a newly formed joint venture, Laurel Mountain Midstream LLC, in exchange for a 51% ownership interest in the joint venture. In addition to its ownership interest, Williams will operate the gathering system.
  The joint venture’s anchor customer will be Atlas Energy Resources, which holds a significant acreage position in the Marcellus with more than 550,000 acres, including 274,000 acres in the high-potential southwest Pennsylvania area. In addition to the anchor-tenant relationship with Atlas Energy, the emerging potential throughout the Appalachian Basin will offer substantial opportunity to service other producers in the future with large scale, highly reliable systems that the joint venture intends to rapidly expand.
  The existing southwest Pennsylvania gathering system is currently connected to numerous interstate natural gas pipelines and expansions under way by several pipelines that will offer additional takeaway capacity to Eastern end-user markets in the future. One of these expansions is Williams’ Rockies Connector project, a proposed expansion of the Transco system that is designed to connect natural gas supplies originating from the Appalachian and Rockies supply regions to growing markets on the East Coast.