YOUNGSTOWN, Ohio -- When Exterran Energy Solutions begins operations next
year at the Salt Springs Road Industrial Park, the Houston-based company will
build machines for the $900 million two-plant gas processing complex to be built
in Columbiana and Harrison counties by Chesapeake Energy Corp. and its
partners.
“One of the companies constructing a large factory in Ohio is Exterran, which will build compressors and some processing equipment for us,” says George Passela, executive vice president and chief financial officer for M3 Midstream LLC, also based in Houston. M3, which does business as Momentum, is one of the partners in Chesapeake’s project touted as the largest midstream service complex in Eastern Ohio.
The link between Exterran’s expansion here and the $900 million dollar project is more affirmation (think of the thousands of miles of pipe V&M Star produces) of what Eric Planey of the Youngstown/Warren Regional Chamber promotes as the Mahoning Valley’s ideal location to become “the hub of the Utica shale supply chain.”
A spokesman for Weatherford International, a Swiss oilfield services company that operates in 50 countries, confirmed Tuesday to The Business Journal that company executives are scouting “several sites” in the Youngstown area to locate a facility. Weatherford provides services to drillers at well sites.
“You are fortunate to have an extremely valuable natural resource in your state,” says Passela. “It has enormous potential to affect the entire economy of Ohio.”
Numerous subcontractors will be involved in Chesapeake's project, he begins. “There will be a construction company that does the actual installation of the pipelines. There are several pipelines to make this project work, carrying both gas and natural gas liquids [to and from the Columbiana and Harrison County plants], and then there will be fabricators who build the very vessels that comprise a natural gas processing and fractionation plant.”
As many as 2,000 construction jobs could result, along with 200 permanent, top-paying jobs once the processing plants are operating, according to Passela.
Exterran broke ground Feb. 28 for its $13.2 million, 65,000-square-foot plant where it will employ 103 workers to manufacture separators, dehydrators and other equipment used to treat and process natural gas and oil. The plant, expected to be turning out product during the first quarter of 2013, will employ 103 workers. That timetable coincides with the second-quarter 2013 start-up of the gas processing plant in Kensington -- a tiny town just a stone’s throw from the Columbiana/Carroll County border -- and the fractionation plant in Harrison County.
A graphic on the M3 website depicts where the two plants will be located and the pipelines that will connect them.
Passela says negotiations are under way with landowners in Hanover Township and some purchase options have been secured. But given his company’s role in the massive project – designing and building the plants – he’s careful not to “get ahead of ourselves and presume anything. We have a process to go through with the various regulatory agencies, and we’ll do that step-by-step,” he says.
Chesapeake Energy announced Tuesday that its wholly owned subsidiary, Chesapeake Midstream Development LP, it is joining with M3 Midstream and EV Energy Partners LP, also based in Houston, to build, operate and supply the processing plants.
Five hours earlier, a press event in the village of Cadiz hailed the $1 billion investment that MarkWest Energy Partners of Denver will make to build two gas processing plants and one fractionation plant in Harrison and Noble counties. Like the Chesapeake project, the MarkWest plants will be linked by an extensive network of pipelines, connecting what’s taken out of the ground in eastern Ohio’s Utica shale with the processors who enable the dry gas and wet gas -- butane, propane and ethane -- to go to market.
“The first step in processing gas rich in liquids is the reverse of refining,” Passela explains. “In refineries, you heat up crude oil and as it boils off, you get different products. In natural gas, in order to extract liquids, you reduce the temperature to varying degrees below zero, and as you do that, the liquids condense and they drop out of the gas stream.”
Thus the wet gas is separated from the dry gas at a cryogenic processing plant, the industry term for the facility to be built in Kensington.
The next step is fractionation, which will occur at the Harrison County plant. The term is derived from the fractions of different liquid gases that need to be further separated. “You have to pass that raw mix through a fractionator,” Passela continues.
The eastern Ohio processing facilities to be built by Chesapeake and its partners will compete with the processing facilities to be built by MarkWest in eastern Ohio, although in other shale plays where MarkWest already operates such plants, Chesapeake is one of its customers.
"Companies like Chesapeake, Range Resources, Anadarko, Gulfport, Conoco, BP -- these are our customers," says the CEO of MarkWest, Frank Semple. "These are the ones that do the drilling. We take it from there."
MarkWest has a deal with Gulfport Energy to process its gas at the Harrison County plant, which also is expected to begin operations in the second quarter of 2013.
“We have gas and acreage dedicated to our system from three companies, who also happen to be joint venture partners,” Passela notes. “MarkWest has acreage and gas dedicated from one company.”
The Chesapeake and MarkWest processing plants each will have the capacity to process 200 million cubic feet of gas per day; Chesapeake’s fractionator will separate 600 million cubic feet of wet gas per day. MarkWest has not said where it will build its eastern Ohio fractionator.
During the first phase of Chesapeake's midstream services project, most of the $900 million investment will be made. But there could be substantial second phase, when more capacity is added to both plants, Passela says. “That’s to be determined. It depends on how the drilling progresses and how much additional volume has to be gathered and processed.”
“One of the companies constructing a large factory in Ohio is Exterran, which will build compressors and some processing equipment for us,” says George Passela, executive vice president and chief financial officer for M3 Midstream LLC, also based in Houston. M3, which does business as Momentum, is one of the partners in Chesapeake’s project touted as the largest midstream service complex in Eastern Ohio.
The link between Exterran’s expansion here and the $900 million dollar project is more affirmation (think of the thousands of miles of pipe V&M Star produces) of what Eric Planey of the Youngstown/Warren Regional Chamber promotes as the Mahoning Valley’s ideal location to become “the hub of the Utica shale supply chain.”
A spokesman for Weatherford International, a Swiss oilfield services company that operates in 50 countries, confirmed Tuesday to The Business Journal that company executives are scouting “several sites” in the Youngstown area to locate a facility. Weatherford provides services to drillers at well sites.
“You are fortunate to have an extremely valuable natural resource in your state,” says Passela. “It has enormous potential to affect the entire economy of Ohio.”
Numerous subcontractors will be involved in Chesapeake's project, he begins. “There will be a construction company that does the actual installation of the pipelines. There are several pipelines to make this project work, carrying both gas and natural gas liquids [to and from the Columbiana and Harrison County plants], and then there will be fabricators who build the very vessels that comprise a natural gas processing and fractionation plant.”
As many as 2,000 construction jobs could result, along with 200 permanent, top-paying jobs once the processing plants are operating, according to Passela.
Exterran broke ground Feb. 28 for its $13.2 million, 65,000-square-foot plant where it will employ 103 workers to manufacture separators, dehydrators and other equipment used to treat and process natural gas and oil. The plant, expected to be turning out product during the first quarter of 2013, will employ 103 workers. That timetable coincides with the second-quarter 2013 start-up of the gas processing plant in Kensington -- a tiny town just a stone’s throw from the Columbiana/Carroll County border -- and the fractionation plant in Harrison County.
A graphic on the M3 website depicts where the two plants will be located and the pipelines that will connect them.
Passela says negotiations are under way with landowners in Hanover Township and some purchase options have been secured. But given his company’s role in the massive project – designing and building the plants – he’s careful not to “get ahead of ourselves and presume anything. We have a process to go through with the various regulatory agencies, and we’ll do that step-by-step,” he says.
Chesapeake Energy announced Tuesday that its wholly owned subsidiary, Chesapeake Midstream Development LP, it is joining with M3 Midstream and EV Energy Partners LP, also based in Houston, to build, operate and supply the processing plants.
Five hours earlier, a press event in the village of Cadiz hailed the $1 billion investment that MarkWest Energy Partners of Denver will make to build two gas processing plants and one fractionation plant in Harrison and Noble counties. Like the Chesapeake project, the MarkWest plants will be linked by an extensive network of pipelines, connecting what’s taken out of the ground in eastern Ohio’s Utica shale with the processors who enable the dry gas and wet gas -- butane, propane and ethane -- to go to market.
“The first step in processing gas rich in liquids is the reverse of refining,” Passela explains. “In refineries, you heat up crude oil and as it boils off, you get different products. In natural gas, in order to extract liquids, you reduce the temperature to varying degrees below zero, and as you do that, the liquids condense and they drop out of the gas stream.”
Thus the wet gas is separated from the dry gas at a cryogenic processing plant, the industry term for the facility to be built in Kensington.
The next step is fractionation, which will occur at the Harrison County plant. The term is derived from the fractions of different liquid gases that need to be further separated. “You have to pass that raw mix through a fractionator,” Passela continues.
The eastern Ohio processing facilities to be built by Chesapeake and its partners will compete with the processing facilities to be built by MarkWest in eastern Ohio, although in other shale plays where MarkWest already operates such plants, Chesapeake is one of its customers.
"Companies like Chesapeake, Range Resources, Anadarko, Gulfport, Conoco, BP -- these are our customers," says the CEO of MarkWest, Frank Semple. "These are the ones that do the drilling. We take it from there."
MarkWest has a deal with Gulfport Energy to process its gas at the Harrison County plant, which also is expected to begin operations in the second quarter of 2013.
“We have gas and acreage dedicated to our system from three companies, who also happen to be joint venture partners,” Passela notes. “MarkWest has acreage and gas dedicated from one company.”
The Chesapeake and MarkWest processing plants each will have the capacity to process 200 million cubic feet of gas per day; Chesapeake’s fractionator will separate 600 million cubic feet of wet gas per day. MarkWest has not said where it will build its eastern Ohio fractionator.
During the first phase of Chesapeake's midstream services project, most of the $900 million investment will be made. But there could be substantial second phase, when more capacity is added to both plants, Passela says. “That’s to be determined. It depends on how the drilling progresses and how much additional volume has to be gathered and processed.”
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