CADIZ -- MarkWest Energy and Gulfport Energy are joining forces to collect and distribute natural gas condensate produced during Utica and Marcellus Shale drilling operations in Belmont, Harrison, Guernsey, Noble and Monroe counties with a new facility slated to open next year.
Oilfield services giant Schlumberger defines condensate as a "hydrocarbon liquid dissolved in saturated natural gas that comes out of solution when the pressure drops below the dewpoint." ",448,0," ",560,0," "The bulk of this is gathered at the well pad. Some of it drops off into the pipeline, while some drops off in compressor stations," Paul Weissgarber, senior vice president of Crosstex Energy, said of condensate, further referring to the material as "a very light oil."
"We are very excited to continue expanding our relationship with Gulfport Energy and provide a critical new service offering for the stabilization and marketing of condensate," said Frank Semple, chairman, president and CEO of MarkWest. "We believe the increased use of condensate as a feedstock for refineries, and the growing demand from Canada for diluent, will support local, regional and international consumption of Utica condensate."
Many eastern Ohio residents who originally signed leases with Wishgard LLC or Tri-Star Energy have seen those contracts turned over to Gulfport, while Gulfport has also signed many county landowners to their own leases. Energy analysts referred to the well Gulfport Energy drilled in the Egypt Valley area of Belmont County last year as a "monster" upon learning it generated 28.5 million cubic feet of natural gas per day.
During 2014, Gulfport plans to use as much as $634 million to drill as many as 95 new Utica Shale wells. The company has over 147,000 net acres under lease in the Utica Shale.
The condensate facility, to be built in Harrison County, will have initial stabilization capacity of 23,000 barrels per day, while an immediate 30,000 barrels per day expansion is anticipated. Raw condensate will be delivered by truck and stabilized at the facility. Once stabilized, the condensate will be transported by truck and rail to local refinery markets and Canadian export markets. In the future, a condensate gathering system and regional pipelines may be constructed to support additional deliveries to the facility.
MarkWest has already invested billions of dollars for infrastructure in the Upper Ohio Valley. The company has contracts to process Ohio gas at its Cadiz, Hopedale and Seneca plants for Gulfport, as well as Antero Resources, Petroleum Development Corp. and Rex Energy. In West Virginia, MarkWest processes gas at the Mobley site in Wetzel County and the Majorsville complex in Marshall County, working for producers such as Chesapeake Energy, Magnum Hunter, Consol Energy, Noble Energy and Range Resources.
MarkWest also plans to use its "Liberty Ethane Pipeline" to transport ethane from the Majorsville complex. The product will then head to the Gulf Coast via the ATEX pipeline or to Sarnia, Canada via the Mariner West pipeline.
"Ethane produced in the Northeast has the potential to become a key driver for the future expansion of the global petrochemical industry," MarkWest information states.
Overall, Semple said MarkWest should be able to process over 4 billion cubic feet of Marcellus and Utica shale natural gas -- dry methane, plus the NGL -- per day by the end of 2014.