Antero Midstream is a midstream infrastructure company primarily operating in the Appalachian Basin, with assets in West Virginia and Ohio. Its core function is to provide gathering, compression, processing, fractionation, and water handling services to upstream producers—most notably Antero Resources—under long-term agreements. The company is structured into two principal segments: Gathering & Processing (including pipelines, compressors, and processing plants) and Water Handling (freshwater delivery, produced water recycling, storage facilities).
In its gathering and processing operations, Antero Midstream owns and operates an integrated network of low- and high-pressure pipelines and compressor stations that transport raw gas from wells to processing facilities, ultimately directing clean gas and natural gas liquids (NGLs) to end markets. It has entered into a joint venture with MPLX for certain processing and fractionation assets, which contributes to its ability to handle NGLs and integrate downstream infrastructure. Under its gathering/compression agreement with Antero Resources, the company typically earns fixed fees (adjusted via CPI) and may also receive variable fees when delivered volumes exceed minimum commitments.
On the water side, Antero Midstream has built an extensive closed-loop water infrastructure to support upstream completion operations. It owns fresh water pipelines, storage, pump stations, and systems for reclaiming and recycling produced water. By transporting water and recycling produced water, the company reduces truck traffic and disposal costs, while ensuring water is available at well pads for completions. This water handling business operates under service contracts with Antero Resources and potentially third parties in its service area.
Antero Midstream’s business model is heavily dependent on the activity and production levels of Antero Resources, which represents virtually all of its service revenue. Its capital allocation priorities include expanding pipeline and compression capacity, acquiring complementary assets (for example, recent bolt-on acquisitions in the Marcellus) to increase coverage, and optimizing its water systems. Because it largely does not operate upstream wells itself, its operational and financial exposures come from service contract performance, utilization of its infrastructure, cost control, and the upstream producer’s capital spending decisions.