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Processing: Billions being pumped in

February 27, 2013
By CASEY JUNKINS - For The Times Leader , Times Leader

NATRIUM - The plant has yet to process its first barrel of butane, but Dominion Resources and Caiman Energy have struck a $1.5 billion deal to operate the Natrium facility, along with other Utica and Marcellus shale infrastructure.

The Natrium plant is but one of the major natural gas processing projects under construction in the Upper Ohio Valley. MarkWest Energy, Williams Partners and M3 Midstream are pumping billions of dollars into eastern Ohio and northern West Virginia to separate and transport the methane, ethane, propane, butane, pentane, oil and other valuable materials.

Energy companies such as Chesapeake Energy are also building natural gas compressor stations - such as those at Battle Run and Sand Hill - to help move the gas through pipelines so that it can reach the processing plants.

Article Photos

Photo/Casey Junkins
Chesapeake Energy is building natural gas compressor stations like this throughout the area to transport the company’s product.

All told, the overall investment in moving and processing the natural gas after a well has been fracked and starts producing is in the tens of billions of dollars.

A company such as Chesapeake, which has agreed to supply the Dominion plant with its gas stream, is known in the industry as a "producer" because it sells the gas that it pumps out of the ground. Because the wet gas requires processing before it can go to market, Chesapeake and other producers send their gas to companies such as Dominion, Williams or MarkWest for processing. The separated gas products are then ready for use, with the ethane possibly going to a cracker plant somewhere in North America because the substance is too volatile to keep in a tank.

Though the $500 million Dominion plant is taking longer to complete than the originally projected date of Dec. 31, work continues at a frantic pace. Officials with both Dominion and Caiman believe the plant's location along the Ohio River in Marshall County will allow it to be a centerpiece in the burgeoning Utica and Marcellus shale industries in Ohio and West Virginia, respectively.

"The Utica Shale has enormous potential to provide jobs and revenues for the local Ohio economy," said Thomas F. Farrell II, Dominion's chairman, president and chief executive officer. "Because the portion of the Utica Shale targeted today produces a rich gas stream, gathering and processing capacity must be developed so that the natural gas and valuable natural gas liquids can be separated and sold."

Dominion and Caiman will operate the Natrium plant and other infrastructure under the badge of Blue Racer Midstream. In the natural gas and oil industry, the term "midstream" broadly refers to pipelines that gather and transport gas and oil, processing plants, fractionators and compressor stations.

Once the Natrium plant opens, the company plans to employ 40-45 full-time, permanent workers for jobs at the plant itself. Dominion spokesman Charles Penn said these jobs will pay from $20-$30 per hour.

He said those looking for a career working at a natural gas plant will need different skills depending upon their specific positions. Some workers will need electrical experience in an industrial setting, while others will need experience in process operation control that they may have from working in gas, paper, water or chemical plants. There will also be positions for rail and tanker truck loading.

The Dominion facility will also feature a connection to the CSX Corp. railroad line running along the Ohio River.

Construction workers recently built the railroad lines that will connect the Dominion plant to the CSX line, which is part of the historic Baltimore & Ohio Railroad.

"Cars would be pulled onto the siding (rail) and be loaded, then taken away when full," Penn said of the rail connection.

In April, Caiman sold nearly all of its Marcellus Shale assets - most substantially the processing plant located at Fort Beeler along U.S. 250 between Moundsville and Cameron, as well as the fractionation facility along the Ohio River south of Moundsville - to Williams for $2.5 billion. Williams is also operating a field office in the TeleTech building in Moundsville.

MarkWest now has its Mobley plant operational in Wetzel County, as the company is going to receive some gas via the Magnum Hunter Resources pipeline running under the Ohio River from Monroe County.

"With the initial plant now online and expansions well under way, our producer customers now have the infrastructure needed to efficiently develop their prolific Marcellus Shale acreage in northern West Virginia," said Frank Semple, chairman, president and chief executive officer of MarkWest.

"The initial Mobley project presented a significant challenge because of the remote location and mountainous terrain."

MarkWest has been operating a processing facility at Majorsville in eastern Marshall County for the past few years. The company also is building a $500 million plant just outside Cadiz, some of which came on-line to process Gulfport Energy late last year.

In addition, MarkWest is developing a second processing complex in Noble County.

The Harrison and Noble processing complexes will be connected through a gathering system to the Harrison fractionation complex, which will include 100,000 barrels per day of fractionation capacity by early 2014.

M3 Midstream is building a $900 million processing complex in eastern Ohio. According to a map on the M3 website, it appears the Harrison County portion of the complex is being built near Scio; the Columbiana County part of the complex will be located near Kensington, Ohio; and the Carroll County portion will be at Leesville, Ohio.



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