This excerpt taken from the MWE 8-K filed May 7, 2009.
FORMATION OF ARKOMA CONNECTOR JOINT VENTURE
DENVER, CO and BOSTON, MA May 4, 2009 - MarkWest Energy Partners, L.P. (NYSE: MWE) and ArcLight Capital Partners, LLC today announced the formation of a joint venture dedicated to the construction and operation of the Arkoma Connector pipeline, a 50-mile interstate pipeline that will provide approximately 625,000 dekatherms per day of Woodford Shale takeaway capacity and interconnects with Midcontinent Express Pipeline and Gulf Crossing Pipeline. Upon completion of the Arkoma Connector, which is expected to occur this month, MarkWest will have total takeaway capacity in southeast Oklahoma of approximately 1.3 billion cubic feet per day.
Under the terms of the joint venture, ArcLight is acquiring a 50 percent equity interest in the pipeline for $62.5 million. MarkWest will operate the pipeline and ArcLight will pay a fee to MarkWest to manage the joint venture. Following operational commencement of the pipeline, the joint venture partners will invest equally in the ongoing costs associated with operating or expanding the pipeline.
We are pleased to partner with ArcLight on the Arkoma Connector pipeline, a strategic project that will result in additional market access for our Woodford shale producer customers and provide long-term value to MarkWest unitholders, said Frank Semple, Chairman, President and Chief Executive Officer of MarkWest Energy Partners. ArcLight has a strong reputation for recognizing growth opportunities in the energy sector and we look forward to benefiting from ArcLights experience and expertise as we build a long-term business relationship. This joint venture demonstrates our commitment to strategic growth projects while at the same time achieving our balance sheet and distribution objectives.
We are excited about the partnership with MarkWest, said Dan Revers, Managing Partner at ArcLight. This transaction is consistent with our goal of investing up and down the entire energy industry value chain and represents an important midstream investment for ArcLight.
Morgan Stanley is acting as MarkWests exclusive financial advisor in connection with the formation of the joint venture. Stifel, Nicolaus & Company served as financial advisor to ArcLight.