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In order to assist the fast increasing drilling operations of the southern part of the Utica Shale, MarkWest Utica EMG L.L.C., which is a joint venture between natural gas processor and distributor, MarkWest Energy Partners LP (MWE - Analyst Report) and The Energy and Minerals Group, has further expanded its midstream operations.  

At its Seneca complex, MarkWest Utica is planning to build a third cryogenic gas processing plant, which is expected to process cryogenic gas at a rate of 200 million cubic feet per day (MMcf/d). The Seneca complex is located in the Noble County, Ohio.

MarkWest Utica reveals that its processing complex will have three plants, all of which are estimated to process cryogenic gas at a rate of 600 MMcf/d. MarkWest Utica added that the first two plants are expected to start their operations by the last quarter of 2013, while the third one will become operational by the second quarter of 2014.

Additionally, MarkWest Utica is improving its Cadiz processing complex, which is based in Harrison County, Ohio. Recently, MarkWest Utica started operation of the Cadiz I plant, which has a processing capacity of 125 MMcf/d. Currently, the complex has a total capacity of 185 MMcf/d but by the middle of 2014 the capacity will be increased to 325 MMcf/d.  

Moreover, MarkWest Utica believes that by the middle of 2014, its Utica Shale-based overall midstream operations will include gathering pipeline, which is expected to spread over three hundred miles. It will also include 5 processing plants with processing capacities of 1 billion cubic feet per day.

Denver, Colorado-based MarkWest Energy, a master limited partnership (MLP), is engaged in the gathering, processing and transmission of natural gas, transportation, fractionation and storage of natural gas liquids (NGLs), and the gathering and transportation of crude oil. The partnership conducts its operations in four segments: Southwest, Northeast, Liberty and Utica.

We like MarkWest Energy’s high-quality and diverse portfolio of midstream assets, which generate stable and recurring revenues from long-term fee-based contracts.  

On the flip side, the partnership typically depends on equity and debt markets for growth finance. Market turmoil resulting from issues such as the recent subprime crisis will impact MLP growth prospects.

MarkWest Energy currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

In the energy sector, firms that are expected to significantly outperform the U.S. equity market over the next one to three months are InterOil Corporation (IOC - Snapshot Report), EPL Oil & Gas Inc. and EQT Midstream Partners LP (EQM - Snapshot Report). All three firms currently carry a Zacks Rank #1 (Strong Buy).

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