Regency Energy Partners LP (NYSE: RGP) announced Aug. 7 it entered into a joint venture agreement with American Energy - Midstream LLC—a subsidiary of Aubrey McClendon's Oklahoma City-based American Energy Partners LP—for the construction and operation of Regency’s Utica Ohio River Project.

The project will include construction of a 52-mile, 36-inch gathering trunkline that will be capable of delivering up to 2.1 billion cubic feet per day (Bcf/d) to Rockies Express Pipeline (REX) and Texas Eastern Transmission on the southern end of the line.

Additionally, there is the potential to connect to the interstate grid on the northern end of the trunkline which would increase overall system deliverability to 3.5 Bcf/d. The project will also consist of the construction of 25,000 horsepower of compression at the REX interconnect.

The full project is expected to be completed in the third quarter of 2015. Total project costs are expected to be roughly $500 million, with Regency contributing 75%, and American Energy - Midstream contributing 25%. Dallas' Regency will construct and operate the project on behalf of the joint venture.

In addition, Regency and American Energy's Utica subsidiary will enter into a gathering agreement for gas produced from the play in eastern Ohio by American Energy. Regency and American Energy will contribute all previously signed agreements to the joint venture. These agreements include volume commitments and large acreage dedications.

As a result, Regency and American Energy - Midstream will upsize the project to accommodate more than 2 Bcf/d of firm volume commitments. These commitments represent the majority of the projected volumes in the 52-mile footprint of the pipeline.

“We are excited about the strong growth potential of the Utica Shale, and this project will be a main takeaway option for Utica development, providing interconnectivity with major interstate pipelines in 2015,” said Art Cantrell, Regency senior vice president of the eastern region, in a statement. “We are also pleased to partner with AEU [American Energy - Utica LLC], who has a very strong, accomplished management team with a demonstrated track record of success and has committed significant volumes to this project.”