This was the activity in Carroll County one year ago ( MAY 2012 ) ...
CARROLLTON -- Doyle Hawk turns off busy Route 9 and noses his Ford F-150 down a narrow, gravel road that winds into the interior of Carroll County. After five minutes or so of navigating hill after hill, banked on both sides by endless trees and farmland, he stops at a clearing where a small white connection valve juts out of the ground.
“This connects the pipeline that runs through my property,” he says, pointing to a wide path of freshly dug earth that stretches over the horizon. For weeks, Hawk says, workers hired by Chesapeake Midstream LLC dug, foot by foot, miles of trenches and then set in place a seven-mile section of pipe that will become part of a massive superhighway for the oil and gas industry.
What’s happening here foreshadows what’s likely to occur in the next two to three years in Columbiana, Mahoning and Trumbull counties as energy and pipeline companies step up exploration and infrastructure development in the liquids-rich Utica shale.
Hawk, serving his fourth term as a Carroll County commissioner, says that pipeline companies began knocking on his door about a year ago as drilling began on the nearby West well.
He was among the residents who leased their land in 2010 to Patriot Energy Partners at $10 an acre and 12.5% royalties, only to find out later that Chesapeake Exploration LLC purchased the lease for more than $1,000 an acre. “It’s just one of those things,” he shrugs. Today, bonus payments have averaged between $3,000 and $5,000 an acre with 20% royalties. “Who ever knew this would happen?” he says.
Hawk recouped some of his upfront loss by leasing his easement rights to Chesapeake Midstream, which needed the right-of-way so it could to string a collection pipeline from the drilled wells.
The pipeline from the West well, Hawk says, runs almost two miles across his land, and the going rate is $15 per linear foot.
That figure would secure a one-time payment of $150,000 for Hawk and his family, who own some 600 acres. In all, the pipeline from the West well extends about seven miles, he says.
The line will also tie into other wells nearby in various stages of completion, Hawk reports. “I’d say there’s about 35 miles of new pipeline throughout the county,” he estimates.
Chesapeake Midstream, a subsidiary of Oklahoma City-based Chesapeake Energy Corp., is developing a vast network of gathering pipelines that will connect producing wells with processing centers in southern Columbiana County at the town of Kensington and in Harrison County. The processing complex is a $900 million project, in partnership with M3 Midstream / Momentum, to separate wet gas from dry gas and then send the product directly to ports on the Gulf of Mexico.
For the time being, Chesapeake is setting pipelines in the ground and tying into existing gas lines until work is finished on a new compressor station, not far from Hawk’s property along Route 9, he reports. Tennessee Gas, for example, has operated a large pipeline that extends from the Gulf of Mexico to Massachusetts. It runs beneath Carroll County. Dominion East Ohio also has lines in the area.
The pipeline under Hawk’s farm measures 8 inches in diameter. This pipeline feeds into the compressor station, where it’s transferred to a larger line and then transported to another site for future processing.
Chesapeake is also partnering with Spectra Energy and American Electrical Power to develop a 50- to 70-mile pipeline, called the Ohio Pipeline Energy Network (or OPEN), that originates in Columbiana County and moves south into Carroll, Harrison and Noble counties, where it will tie into Spectra’s existing Texas Eastern pipeline system. The system is expected to add one billion cubic feet per day of transportation capacity.
“We’re still in the early stages of development,” says Spectra spokeswoman Wendy Olson. The project recently signed on AEP subsidiary Ohio Power Co. as an anchor shipper.
Other energy midstream companies are rapidly developing plans to capitalize on the liquid gas that oil and gas giants believe is contained in the Utica and Point Pleasant shale formations.
Enterprise Energy Partners L.P. plans to construct a new 353-mile line to its Appalachia-to-Texas, or ATEX, pipeline from Washington, Pa., through Jefferson and Harrison counties in Ohio, and connect with an existing line in southern Indiana.
In Harrison and Noble counties, MarkWest Energy Partners plans to construct a $500 million processing system that includes a fractionation plant similar to a large-scale operation the company owns in Houston, Pa., and another processing operation in Noble County.
And MarkWest recently signed a long-term agreement with Chesapeake and Antero Resources, which will allow the company to expand its midstream operations in West Virginia.
Once the infrastructure is finished, Hawk estimates there could be as many as 200 miles of new pipeline laid over the next two years in Carroll County alone. “They seem to be employing some local people,” he adds.
Environmental regulations put a halt on some of the activity for several weeks, Hawk notes, because the work included clearing forested areas during the spring mating season for bats.
“Some guys were laid off for awhile,” he says. But work on the lines has since resumed.
Just how many pipeline companies and suppliers are involved is difficult to determine, says Glen Enslen, economic development director of Carroll County.
“They’re not interested in any types of incentives,” Enslen says. “It’s all about how fast they can get things done.”
Carroll County holds title to more than 280 acres that it’s marketing through a private developer to lure new suppliers and businesses related to the oil and gas industry, Enslen notes. “Companies are importing and using locals for work,” he reports. “But, it looks like they’re going to run into shortages for sure, especially if they’re looking for pipe welders.”
Carroll County Commissioner Tom Wheaton reports that he too has a pipeline that runs across his land just south of Carrollton. “I think as of now, we have 37 well sites in the county, and 15 more were permitted in the last two weeks,” he says, underscoring how Carroll County has emerged as the core of the shale play.
Easement leases vary in size and scope, Wheaton says, and the compensation a landowner gets depends the length of the pipeline, its depth and whether potential exists for damaging or disrupting crops on farmland.
“They’ve already fracked three wells around me,” he relates, “and now they’re starting to put in more pipelines.”
Often, these easement leases are negotiated separately in addition to the mineral leases the landowners negotiated earlier, Wheaton says. Pipeline is buried at least three feet underground, he notes.
Along state Route 43 just southeast of Carrollton, workers are busy setting pipe as part of Chesapeake’s massive collection project. The company contracted to excavate and lay the pipe is STI, based in Buna, Texas.
“Contractors, trucking companies are keeping very busy,” Wheaton says. “They’re bringing a lot of work from out of town, but there are job openings everywhere.”
On May 1 and 2, members of the Laborers International Union staged a protest where Chesapeake and its subcontractor, Progressive Pipeline based in Meridian, Miss., are piecing together a 13-mile section of pipe in Bergholz, along the western edge of Jefferson County.
“We’re frustrated that local workers aren’t being hired as these pipelines are set in,” laments Jake Croston, president and field representative of Laborers Local 1015 in Canton. “When you drive around Carroll County, you see license plates from Texas, Oklahoma, Arkansas and Louisiana,” he says. “I have nothing against these guys, but we think there should be more of our people, and they’ve hired none.”
Croston says his union’s training program is among the best and largest in the country, and the rank and file are well-qualified for the positions needed for pipeline construction. “We want local jobs for our local economy,” he says.
Chesapeake responded in a statement that hiring local workers has always been a priority since the company entered the Ohio market. Chesapeake says it also considers other factors, such as safety performance record, scheduling availability and costs when a subcontractor is hired.
“To suggest the we do not hire contractors that use local labor is completely false and companies here in Ohio, both union and nonunion, can confirm our practices,” Chesapeake said.
In the case of the Bergholz project, 11 requests for bids were sent out, Chesapeake said, “and Progressive Pipeline, using some local laborers, is the one that was awarded that project.”
However, Croston says he isn’t buying it, and that the union plans to picket other sites in the Ohio Valley where pipelines are under construction. “We intend to keep getting our message out,” he says. “We have the qualified workers to do these jobs.”
On May 1 and 2, members of the Laborers International Union staged a protest where Chesapeake and its subcontractor, Progressive Pipeline based in Meridian, Miss., are piecing together a 13-mile section of pipe in Bergholz, along the western edge of Jefferson County.“We’re frustrated that local workers aren’t being hired as these pipelines are set in,” laments Jake Croston, president and field representative of Laborers Local 1015 in Canton
He is frustrated that UNION workers are not being hired for the pipelines.
Tuesday, July 30, 2013
KENSINGTON, Ohio -- What oil and gas producers have longed for in the Utica shale is now starting to come on line -- and sales have begun of natural gas processed at the huge new cryogenic plant here.
The initial phase of Utica East Ohio Midstream LLC's cryogenic plant is now in operation, allowing for the first time natural gas from nearby wells in this part of eastern Ohio to be processed and marketed, officials reported late Monday.
"Completing this first stage of the project is an important milestone in advancing the development of the Utica shale formation in Ohio, as wells can begin producing both natural gas and natural gas liquids," Frank Tsuru, president and CEO of M3 Midstream, said in a statement.
M3, Access Midstream and EV Energy Partners partnered to form UEO Midstream, which is developing a $900 million, multi-phased infrastructure network that consists of the Kenginston cryogenic plant in Columbiana County and a day natural gas liquids fractionation, storage and rail facility near Scio in Harrison County.
Producers across the Utica have said that the biggest hindrance to well production is the lack of pipeline and processing infrastructure. MarkWest Energy Partners is also developing a large cryogenic/fractionation network in Harrison County, and that operation is partially underway.
"We are pleased to commission the first fully integrated natural gas processing and fractionation project in Ohio, and proud that these facilities have been built safely and in compliance with Ohio's environmental regulations," Tsuru said.
Tsuru reported that gas sales from the plant began July 28. Houston-based M3 serves as the facility manager of the plant facilities and is responsible for their construction and operation. Oklahoma City-based Access Midstream is responsible for the construction and operation of all pipeline facilities upstream of the UEO plants
The first phase of the project consists of 63 miles of gathering lines capable of transporting natural gas and natural gas liquids, UEO said in a press release.
The first train of the Kensington plant is able to process 200 million cubic feet of natural gas per day, and a second and third phase are planned at the site. The plant separates "dry" gas such as methane from "wet" gas by chilling the gas to about 150 degrees below zero.
Wet gas is then transported to the Scio plant, where it's processed into saleable products such as ethane, butane or propane. The dry gas, or methane, is sold into existing natural gas lines.
Once the second and third phases of the project are finished, the UEO system will be able to process 800 million cubic feet of gas per day through cryogenic processing, 135,000 barrels of oil per day through natural gas liquids fractionation, 870,000 barrels of natural gas liquids storage, and a rail facility capable of loading 90 cars a day.
Construction of the second phase of the project is expected to be completed by December.
Access Midstream CEO Mike Stice said that cooperation on the project allowed it to be finished on time and on budget.
"Access provided the gathering and compression while M3 delivered on the processing and fractionation. Together, phase one of this multi-phase development resulted in 200 Mmcfd of capacity being placed in operation both on time and on budget," Stice said in a statement.
Mark Houser, president of and CEO of EV Energy Partners, said that the new processing network is sure to help production in the Utica shale.
"We are thrilled to be a part of the midstream infrastructure development of the Utica shale play," he said. "The commencement of operations for the UEO project will be a huge boost for Utica shale producers that have been significantly constrained by the lack of sufficient midstream infrastructure in the area."
More than 1,700 people thus far have been employed to construct the UEO network, and more than 60% of them are Ohioans. About 50 full-time employees would be needed to staff both facilities, with 15 additional employees needed to operate the rail terminal at the Scio plant, according to the announcement.
UPDATE: SPECTRA ENERGY Compressor Station for the Kensington Cryogenic Facility ...
STEUBENVILLE - Officials with Spectra Energy said Thursday two Jefferson County properties being considered for a multi-million dollar compressor station are off the table because the landowners have opted not to participate.
Susan D. Waller, vice president of stakeholder outreach and sustainability at Spectra, said company policy does not allow her to identify landowners by name. The Dillonvale option is still among those being considered.
She did say, however, the company still plans to notify the Federal Energy Regulatory Commission which of the six remaining sites it thinks would be best suited for the plant when they update their resource reports on or before Sept. 20. That would keep them on pace with the company's internal timeline, which, if the necessary certifications are granted, would see construction starting somewhere around March 2015.
If all goes as planned, the $500 million project, including about 70 miles of pipeline, would be certified late in 2014. They hope to have the plant in service by the fourth quarter of 2015.
The pipeline would extend from Columbiana County, near the Kensington plant, into Carroll, Jefferson, Belmont and Monroe counties, though the actual route still is being tweaked in response to factors such as crops, sewage systems and geography.
Waller previously said compressor stations are typically the size of a barn and equipped with state-of-the-art safety controls such as emergency shutoff valves, sensors and around-the-clock monitoring.
Has anything been processed through this plant yet?
" ... Has anything been processed through this plant yet? .."
M3 Midstream LLC president and chief executive officer Frank Tsuru today announced that as of July 28th the first phase of the Utica East Ohio Midstream, LLC (UEO) project is in service, receiving rich Utica Shale production, processing natural gas liquids and redelivering residue gas to interstate markets.
Building pipelines and processing facilities is the next step in developing Ohio’s Utica Shale formation.
The process is in full swing at different sites around eastern Ohio, but it has put a crimp in Utica Shale development.
The industry uses the term “midstream” to describe the process of moving oil and natural gas from wells to initial processing sites. Leasing property and drilling wells is called “upstream,” while “downstream” is used to describe refining and marketing oil and gas products.
Midstream development has been cited by drilling companies as a reason activity is slower than some had predicted toward the end of 2011.
For example, Steve Dixon, acting chief executive officer at Chesapeake Energy, said the slow development of midstream operations caused the company to curtail and restrict production during 2012. Production likely would have doubled had midstream operations not been constrained, he said.
Through the end of March companies had drilled nearly 300 wells into the Utica Shale, but only 81 were listed as producing. In many cases companies have idled wells as they wait to connect pipelines that will move liquid natural gas to processing centers, such as fractionation plants that separate ethane, propane, butane and other compounds from methane.
Companies hope to see many of the processing plants operating by the end of this year.
One of the biggest projects — gas fractionation plants and pipelines — is developing in Columbiana, Carroll and Harrison counties. M3 Midstream, Access Midstream Partners and EV Energy Partners, which is part of EnerVest, are building a network called Utica East Ohio Buckeye.
A second project has Access, EnerVest and Total S.A., a French oil and gas company, as partners in Cardinal Gas Services, which will build gas gathering lines through the region.
Outside Cadiz in Harrison County, Denver-based MarkWest Energy Partners and the Energy & Minerals Group, a Texas company, are building a facility to gather and process liquid natural gas. The facility already has agreements with four drilling companies to process their product.
In Mahoning County, NiSource — parent company of Columbia Gas — and Hilcorp Energy are developing a processing network and pipelines.
Dominion Resources — parent company of Dominion East Ohio — and Caiman Energy have a joint venture for a project called Blue Racer Midstream. Plans are to build new pipelines and convert existing pipelines to move gas to Dominion’s Natrium Extraction Plant in West Virginia.
The projects total billions of dollars for construction. Hundreds of construction workers are on the job now at different sites, which will provide dozens of permanent jobs once facilities are operating.
Miles of Pipeline Ready for Installation ...
The Tribune Chronicle reported on March 20th about Integrity Kokosing Pipeline Services’ (IKPS) work that stretches across Franklin Township, near Warren, OH. Workers from IKPS are scattered throughout the countryside constructing sections of the 20,700 foot-long Access Midstream Millport Pipeline project that will lead to the M3 Midstream Gas Processing Plant in Kensington, OH. This is just a portion of the miles of pipeline work that IKPS is currently completing across Ohio, Pennsylvania and West Virginia. IKPS is an affiliate company of The Kokosing Group.
"... in Franklin township, near Warren, Ohio ..." ???
There is a Franklin Township near Summitville, Ohio ...
Photo of same pipes as above before they were buried ...
Lo-Res photo ...
Hi-Res photo attached ...
Hi-Res photo of the "pipes" attached here ...