Keystone Midstream, a newly formed joint venture between Rex Energy Corp. and Stonehenge Energy Resources, L.P., will initially invest up to $25 million to build a high-pressure gathering system and cryogenic gas processing plant in Butler County, PA.
Stonehenge Energy Resources, L.P. was formed in 2007 to design, build, own and operate midstream assets such as natural gas gathering, treating and processing facilities. Stonehenge is a portfolio company of Energy Spectrum Capital, a private equity firm focused exclusively on the energy industry with over $1 billion in assets under management.
Rex Energy owns 40% of Keystone Midstream and has contributed to the joint venture its existing gathering system in Butler County, PA. Stonehenge owns 60% of Keystone Midstream and has contributed to the joint venture the Sarsen Gas Plant, a cryogenic gas plant with 40 MMcf/d of processing capacity. Rex Energy entered into a gathering and processing agreement with Keystone Midstream in which Rex Energy has reserved 20 MMcf/d of capacity in the Sarsen Gas Plant in 2010 and 40 MMcf/d of capacity thereafter. Stonehenge will manage the operations of Keystone Midstream.
Benjamin W. Hulburt, Rex Energy’s president and CEO, commented, “Forming the Keystone Midstream joint venture significantly reduces Rex Energy’s capital investment in necessary infrastructure in Butler County and leverages the extensive midstream experience of the Stonehenge management team.”