Announcement announced this evening. This is the complex that was considered to be the future hub of all the future Utica construction and MWE took a much larger ownership position in the Hopedale facilities.
Tonights press release again states that to be true. The ownership is listed in the press release as follows:
---- The Hopedale complex is jointly owned by a subsidiary of MarkWest and MarkWest Utica EMG, L.L.C. (“MarkWest Utica EMG”) a joint venture between the Partnership and EMG---
I had spoken to Investor relations at the time of the formation of the Markwest Utica EMG LLC joint venture and was told
The subsidiary of MWE owns 60% of Hopedale (Thats MWE) plus MWE owns 60% of the MWE-EMG joint venture with an option to increase their ownership of the JV to 70%.
That means MWE owns 60% plus 24% (at the 60% ownership of the JV) totaling 84% of Hopedale or MWE owns 60% plus 28% (at the 70% ownership of the JV) 88% of Hopedale.
So MWE owns 84% of Hopedale and an option to increase that ownership to 88%
I was told this was done at the time because it was expected to be the major hub in Ohio and therefor worth the most in the entire Utica buildout.
This expansion is really terrific for several reasons: 1. It was obviously planned for in the initial Hopedale construction. A doubling of the fractionation capacity in 3 Qs is amazing...a grassroots unit would take 2 years at least. 2. Market Channels are in place.. The nearby TEPPCO pipeline takes ethane south to Texas as ATEX. The TEPPCO pipeline section going North from Hopedale presumably takes Propane still to New England. This new Hopedale unit will just provide even more propane to keep Buy and Win warm in winter! The smaller volume butanes produced will probably go out via truck and rail with some winding up at the DPM export terminal at Hampton Roads. 3. Natural Gas Liquid volumes in both Marcellus and Utica are ratcheting upward rapidly..and MWE is getting most of the action! And 4. 2015 to 2016 going to be a BIG DCF period for MWE..with the basic infrastruction now in place tying in a new production unit is like pumping cash!
I still think that many people here don't understand what Frank Semple is building. And he is building MWE with other people's money giving up as few bits and pieces of non-core assets as he can while keeping his eye on the gold ring on the top shelf.
It was obviously planned for in the initial Hopedale construction. A doubling of the fractionation capacity in 3 Qs is amazing...a grassroots unit would take 2 years at least.
It was also planned even before with the larger ownership of Hopedale in the original MWE-EMG JV in the Utica. When I discussed it with IR and said it appears you have a higher percentage ownership in Hopedale so you would have less to buy back in the future that would require paying a profit on. There was no comment on the other end of the line, only a slight barely audible clearing of the throat.