Apr. 30, 2012 -- A newly constructed private pipeline supplying fresh water to certain natural gas producers drilling in the Marcellus Shale in north-central Pennsylvania is now fully operational, according to an announcement from Aqua America Inc. (NYSE: WTR) and Penn Virginia Resource Partners, L.P. (NYSE: PVR).
With this pipeline, water is for the first time being commercially supplied directly to drill sites in the Marcellus Shale without the public-highway use of heavy-weight 5,400-gallon tanker trucks customarily employed in well completions. In less than a month of operation, the pipeline has already eliminated more than 2,000 water truck trips over rural roadways. In addition, this project supported the creation of approximately 100 local jobs over the course of construction.
The pipeline project is owned and operated by Aqua-PVR Water Services, LLC, a joint venture of certain Aqua America and PVR operating subsidiaries. The 12-inch diameter steel pipeline largely parallels the trunkline of PVR's gathering system in Lycoming County and shares PVR's existing rights-of-way. PVR constructed the fresh water pipeline and handled negotiation of water pipeline capacity contracts with producers. Each company has invested approximately $10.2 million as of March 31, 2012, for construction of the first segment of the project. The joint venture has entered into a three-year agreement with Range Resources - Appalachia, LLC, a wholly owned subsidiary of Range Resources Corporation (NYSE: RRC), to supply fresh water to three of Range's water impoundments.
William H. Shea, Jr., Chief Executive Officer of PVR, said, "We are pleased to see the start of service of the first phase of this new private pipeline water delivery system that so tangibly benefits both the residents and the contracting producers in the local communities where we operate. We look forward to completing the planned extensions of the pipeline and the expansion of service to additional producers in the region."
Aqua America Chairman and CEO Nicholas DeBenedictis said, "We are glad to have entered a business offering a positive alternative to the impact of truck hauling through rural communities, while reducing diesel emissions and the overall carbon footprint of providing needed water to the drilling business. By reducing truck traffic, we are also reducing the noise from the vehicles and wear-and-tear on local roadways, plus helping to reduce carbon emissions associated with the thousands of truck trips that have been eliminated because of the pipeline.
"We've been in the water business for more than 125 years and shale drilling is a very water intensive business," DeBenedictis continued. "As this business continues to grow, it's important that water professionals like Aqua America be involved to ensure the proper management of such an important resource."
About Aqua America
Aqua America (NYSE: WTR) is one of the largest U.S.-based, publicly-traded water utilities and serves almost 3 million residents in Pennsylvania, Ohio, Illinois, Texas, New Jersey, Indiana, Virginia, Florida, North Carolina, New York and Georgia. Aqua America is listed on the New York Stock Exchange under the ticker symbol WTR.
About Penn Virginia Resource Partners
Penn Virginia Resource Partners, L.P. (NYSE: PVR) is a publicly traded limited partnership which owns and manages coal and natural resource properties and related assets, and owns and operates midstream natural gas gathering and processing businesses. We own approximately 900 million tons of proven coal reserves in Northern and Central Appalachia, and the Illinois and San Juan Basins; our midstream natural gas assets are located principally in Texas, Oklahoma and Pennsylvania and include more than 4,200 miles of natural gas gathering pipelines and 7 processing systems with approximately 480 million cubic feet per day of capacity. For more information about PVR, visit www.pvrpartners.com.