Range Resources signs second ethane agreement

Independent oil and natural gas producer Range Resources Corp. has signed a second ethane agreement related to its Marcellus Shale operations.

A subsidiary of Range Resources recently signed an agreement to ship up to 20,000 barrels of ethane per day on Enterprise Products Partners LP's Appalachia-to-Texas ethane pipeline (ATEX Express). Enterprise's ATEX Express open season ended on January 23rd

Range's 20,000 barrels per day commitment gives the company anchor shipper status on ATEX Express with a transportation rate of 14.5 cents per gallon. Range will use its transportation arrangements on ATEX Express to deliver ethane to Mont Belvieu customers along the Gulf Coast as well as operational flow between its expected various customers at various delivery points in the future.

Read about ethane production and disposition as it related to Marcellus Shale production.

ATEX Express will originate in southwest Pennsylvania with a delivery interconnect at MarkWest's Houston, Pennsylvania processing, fractionation and de-ethanization facilities, where Range is the principal producer, and transport the ethane to Enterprises' storage complex at Mont Belvieu. The ATEX Express is currently anticipated to commence operations in the first quarter of 2014. This arrangement will provide Range direct or indirect access to a majority of the ethylene plants in the United States. 

Range previously announced a sales and transportation arrangement to deliver up to 15,000 barrels of ethane per day to Sarnia, Canada beginning in 2013 via the Sunoco Logistics / MarkWest Energy Mariner West project.

Combined with this previous agreement, Range Resources will have 35,000 Bbls/d of ethane transported via pipeline agreements by 2014.

Commenting, Jeff L. Ventura, Range's president and CEO, said, "It is encouraging to see all the components come together to allow us to commence ethane extraction from our liquids-rich Marcellus production. Ethane extraction will materially enhance our revenues and will allow us to better utilize our existing natural gas transportation arrangements. In particular, the ATEX Express will allow us to tap into the most attractive ethane market in North America. As we continue to pursue additional markets both in the United States and globally, we will seek to add to the mix of ethane pricing arrangements within our ethane sales portfolio."

In a January 26 note to investors, Global Hunter Securities said news of the transaction is neutral to the short term, but that “the company continues to demonstrate foresight in maximizing the long term value in its industry-leading Marcellus position, securing necessary capacity to capture the full value of the well stream.”

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