WASHINGTON (dpa-AFX) - Aqua America Inc. (WTR) and Penn Virginia Resource Partners L.P. (PVR)announced that certain of their operating subsidiaries have formed a joint venture, Aqua - PVR Water Services, LLC, to construct and operate a private pipeline system to supply fresh water to natural gas producers drilling in the Marcellus Shale in north-central Pennsylvania.
Penn Virginia Resource noted that the 12-inch diameter steel pipeline will largely parallel the trunkline of PVR's gathering system in Lycoming County and will share PVR's existing rights-of-way.
PVR stated that it is constructing the fresh water pipeline and handling negotiation of water pipeline capacity contracts with producers. Aqua will operate the system when completed and handle water intake supply arrangements.
Aqua and PVR each anticipate investing approximately $12 million for construction of the first segment of the project.
The joint venture has entered into an agreement with Range Resources - Appalachia, LLC a wholly owned subsidiary of Range Resources Corp. (RRC) to supply fresh water to three of Range's water impoundments, and negotiations with other area producers for supply agreements are on-going.
Penn Virginia Resource noted that the joint venture has commenced construction of the fresh water pipeline, and limited water delivery is expected before year-end. The entire 18-mile long first segment of the system is currently anticipated to be fully completed and begin regular operation during the first quarter of 2012.
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