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First Midstream Investment Starts in Ohio-Utica Shale

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DT Midstream (DTM) has started a new gathering pipeline ahead of schedule in the Ohio-Utica shale, the first major midstream investment serving the emerging resource play in the western Appalachian Basin.

In the company’s 4Q23 earnings update, DTM said it began service early on the trunkline of the new gathering system in eastern Ohio. DTM unveiled the project in 2Q23, at the time guiding to start-up in 1H24. The new gathering system can move up to 200 MMcf/d of gas.

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The DTM project is backed by long-term commitments from a large-cap producer, executives said previously. DTM did not disclose the counterparty, but EOG Resources (EOG) is the likely candidate. EOG in 2022 announced its entry in the “Utica Combo,” where the producer acquired leases for 395,000 net acres in eastern Ohio for ~$500MM.

The emerging Ohio-Utica shale represents an exciting opportunity for the midstream sector. Based on guidance from EOG, development of the play could create a need for investments serving three different commodity streams. The initial wells drilled by EOG in the Ohio-Utica produce ~80% liquids and 20% natural gas, according to a 4Q23 update by the producer. EOG in 2024 plans to complete 20 net wells in the Utica play.

East Daley tracks natural gas infrastructure that could handle future growth from the Ohio-Utica in the Northeast Supply and Demand Forecast. Our outlook shows seasonal capacity is available on pipelines moving gas west out of the Appalachian Basin (see figure), creating the potential for upside as production ramps. – Andrew Ware Tickers: DTM, EOG.


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