PVR has two major businesses:
PVR Partners’ midstream natural gas businesses revenues come primarily from gas processing contracts with natural gas producers, from fees charged for gathering natural gas volumes, and the provision of other related services. Our Eastern Midstream business segment includes natural gas gathering systems located in the Marcellus Shale region in Pennsylvania and West Virginia. The Midcontinent Midstream segment includes gathering systems and six processing facilities with 460 MMcfd of total capacity in the Texas/Oklahoma panhandle region*.
The Eastern Midstream business is our newest. Construction of the first gathering systems in Wyoming and Lycoming Counties in Pennsylvania began in 2010. Revenue service on the first 12-inch gas gathering pipelines in Wyoming County began in June 2010, and commercial operations on the first phase of the Lycoming System commenced in February 2011. The second phase of the Lycoming System was constructed and began service during 2011, and the third phase was built and put into service in 2012. The most significant expansion of the Eastern Midstream business came in May of 2012, when we acquired Chief Gathering LLC. This strategic acquisition added 120 miles of gathering pipelines and over 300,000 dedicated acres to our footprint of operations in the Marcellus Shale.
The Eastern Midstream Segment also owns a 51% interest in Aqua-PVR Water Services LLC, a joint venture that transports fresh water to natural gas producers drilling in the Marcellus Shale in Pennsylvania. The water pipeline generally parallels the trunkline of our Lycoming System. The first two phases of the water pipeline were placed into service in early 2012, and the third phase is nearing completion and expected to be in service the first quarter of 2013. A new pump station, with three million gallons-per-day of capacity and a water intake on the West Branch of the Susquehanna River, was commissioned in December 2012.
The Midcontinent Midstream segment includes gathering and processing facilities in the Texas/Oklahoma panhandle area. We owned six natural gas processing facilities having 460 MMcfd of total capacity*. In addition, we own a 25% membership interest in Thunder Creek, a joint venture that gathers and transports coalbed methane in Wyoming’s Powder River Basin.
We own approximately 216 miles of natural gas gathering pipelines and 42 miles of fresh water pipelines in the Eastern Midstream segment*. In the Midcontinent Midstream segment we own approximately 4,541 miles of natural gas gathering pipelines*. We also own a natural gas marketing business, which aggregates third-party volumes and sells those volumes into intrastate pipeline systems and at market hubs accessed by various interstate pipelines.
Coal and Natural Resource Management
Our coal and natural resource management segment primarily involves the management and leasing of coal properties and the subsequent collection of royalties. Our proven and probable coal reserves at year-end 2012 were approximately 871 million tons. Our coal reserves are located in various surface and underground mine seams located in the Central Appalachia, Northern Appalachia Illinois and San Juan Basins.
We also earn revenues from other land management activities, such as selling standing timber, leasing fee-based coal-related infrastructure facilities to certain lessees and end-user industrial plants, collecting oil and gas royalties and from coal transportation, or wheelage, fees. We own approximately 249,000 acres of forestland, the majority of which is located on properties that also contain our coal reserves. We own royalty interests in approximately 6.4 Bcfe of proved oil and gas reserves located in Kentucky, Tennessee, Virginia and West Virginia.
* Data as of December 31, 2012