Williams Partners and Crestwood Equity Partners, as the joint partners in the Bucking Horse natural gas processing plant and Jackalope Gas Gathering System, have signed an agreement with Chesapeake Energy to restructure services in Wyoming’s Powder River Basin.
The restructured services are expected to replace the cost-of-service arrangement and improve economics to support a ramp-up in near-term development and production activity and encourage long-term development across an expanded area of dedication in the region.
Subject to approvals the restructured 20-year term of service becomes effective Jan. 1. The restructured terms are expected to include minimum annual revenue guarantees that support the transition to a new fixed-fee structure over the next five to seven years.
“The restructuring will create a win-win for the joint venture and for Chesapeake that aligns interests for mutual growth,” said Walter Bennett, senior vice president, Williams’ West operating area.
The Bucking Horse plant can process 120 MMcf/d of natural gas, while the Jackalope gathering system includes 184 miles of low-pressure gathering pipelines.