June 17, 2008 / 12:37 PM / 10 years ago

UPDATE 1-Range Resources and Markwest agree to build pipeline

(Recasts; adds details)

June 17 (Reuters) - Range Resources Corp (RRC.N), an independent oil and gas company, said it agreed with Markwest Energy Partners L.P. MWE.N to construct and operate gas gathering pipelines and processing facilities at Marcellus shale.

Markwest, a gas pipeline operator, expects to invest about $50 million in Range’s Marcellus shale acreage in the Applachian Basin in eastern United States. It also expects an additional investment of $125 million in 2009.

“Given our continued drilling success in the Marcellus and the MarkWest arrangement, we anticipate selling material quantities of natural gas by the first quarter of 2009,” Range Resources chief executive, John Pinkerton, said in a statement.

In April, Pinkerton had said in an interview with Reuters that Marcellus is the best shale in Appalachia and that according to some estimates Marcellus has the potential to be the “granddaddy of all shales.”

A number of exploration and production companies are focusing efforts on developing “unconventional” fields in North America where oil and natural gas are locked in hard-to-reach pockets in substances like shales.

The fields were once considered too costly to develop, but recent advances in technology and sky-high energy prices have changed the economics of drilling and heated up competition for acreage. (Reporting by Sakthi Prasad in Bangalore; Editing by Amitha Rajan)

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