Regency Energy Partners LP and American Energy—Midstream LLC (AE-MidCo) entered into a joint venture (JV) agreement for construction and operation of Regency’s previously announced Utica Ohio River project. Also, Regency and American Energy—Utica LLC (AEU) will enter into a gathering agreement for gas produced from the Utica Shale in eastern Ohio by AEU.

Regency and AEU plan to contribute all previously signed agreements to the JV. Those include volume commitments and large acreage dedications. As a result, Regency and AE-MidCo will upsize the project to accommodate more than 2 billion cubic feet per day (Bcf/d) of firm volume commitments, representing most of the projected volumes in the pipeline’s 52-mile footprint.

The project will include construction of a 52-mile, 36-inch diameter gathering trunkline capable of delivering up to 2.1 Bcf/d to the Rockies Express Pipeline (REX) and Texas Eastern Transmission on the southern end of the line. There is also the potential to connect to the interstate grid on the trunkline’s northern end, which would increase the system’s overall deliverability to 3.5 Bcf/d. The project will also include construction of 25,000 horsepower of compression at the REX interconnect.

The total estimated cost of the project is about $500 million, with Regency contributing 75% and AE-MidCo contributing 25%. Regency will build and operate the project on behalf of the JV. The expected completion date is in third-quarter 2015.