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Midstream to build oil, gas processing facility near Leesville

By Carol McIntire

MapUtica East Ohio Midstream is expanding its plans to gather, process and fractionate the liquids-rich natural gas of Eastern Ohio to include the addition of a processing facility in Carroll County.

Construction is underway on two facilities that are part of a system unveiled last fall: a cryogenic processing facility in Kensington in Columbiana County and a fractionation facility near Scio. The two plants will be connected by approximately 60 miles of 12-inch natural gas gathering pipeline and 24-inch natural gas liquid (NGL) pipeline. The system has interconnects with several interstate transmission lines and natural gas liquids lines.

M3 Midstream is building the two plants at a cost of about $900 million and Cardinal Gas Services is building about 200 miles of pipeline at a cost of about $1 billion. M3 Midstream is a partner in Utica East Ohio Buckeye, a joint venture with EnerVest and Access Midstream Partners, which acquired Chesapeake Energy’s midstream operations in December 2012.

Last Friday, George Francisco, executive vice president and chief financial officer for Utica East Ohio Midstream, confirmed that the company plans to build a second cryogenic plant near Leesville in Orange Twp.

M 3 Ohio Gathering, a partner in the Utica East Ohio Midstream LLC joint venture, recently completed the purchase of 94.558 acres of land located at 8349 Azalea Rd., Dennison, from the Mabel A. Leeper Living Trust for $610,000.

“Subsequent to our original agreement with Chesapeake we signed a contract with another producer,” Francisco said. He declined to reveal the name of the producer.

“Dominion East Ohio signed an agreement with M3 Ohio Gathering last fall to harvest 180 million cubic feet of gas per day from wells already committed to M3. A portion of that system will flow to this new plant,” he added.

The Leesville facility will be capable of handling 200 million cubic feet of gas per day initially, but can be expanded to 400 million cubic feet per day with the addition of a “train”, which is a pre-packaged processing unit, according to Francisco. The facility will be connected to the 24-inch gathering line that connects to the Kensington facility.

He said, when complete, the Leesville plant will provide 25 to 30 full time jobs. During the construction phase, the number will jump to between 150 and 200 employees.

Plans are to break ground in late summer or early fall of 2013 and for the plant to be in service by June 2014.

Les Smith, vice president Business Development for Momentum, said the wells throughout Eastern Ohio will be connected by a system of pipelines known a gathering lines and piped to a compressor station on Bay Rd. in Carroll County. From there a 24-inch pipeline will transport the raw gas to a cryogenic facility.

Cryogenic facilities relay on low-temperature distillation to cool the gas to -150 degrees Farenheit. Liquids such as butane, ethane, propane and gasoline are extracted during the temperature change.

“The natural gas will be sold on the market to companies such as Dominion and Tennessee Gas and entered into their pipelines,” Smith said. “The natural gas liquids (NGL) will travel by pipeline to the Scio fractionation facility where they will be separated, sold and shipped via pipeline, railroad and truck.”

A company known ad Genesee & Wyoming has announced its wholly owned subsidiary, The Columbus and Ohio River Rail Road Co., has signed a long-term agreement to haul the natural gas liquids from the Scio facility. They plan to construct a mile-long rail siding and rehabilitate a three-mile storage track.

Frank Tsuru, president and chief executive officer for Utica East Ohio Midstream, said during a recent interview the system is being built to be very modular and scalable to allow for the addition of processing and fractionation trains as needed.

He called the Utica Shale development a “huge economic addition to the people of Ohio,” noting 600,000 of the 900,000 acres involved are under lease to Chesapeake and its upstream partners. He noted Chesapeake spent a lot of money on bonus payments, but even bigger than the bonuses are royalties that will be received by landowners.

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