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Energy company may step on gas

March 15, 2012
By TOM GIAMBRONI - Staff Writer , Morning Journal News

LISBON - An official familiar with Chesapeake Energy Corp.'s plans believes the company will move quickly to build a natural gas processing complex in Columbiana County.

"They want to get this plant in before the other (competitors) ... because the first to the table gets the market," said Columbiana County Port Authority CEO Tracy Drake.

Chesapeake announced Tuesday plans to build a processing plant somewhere in the county, although other sources have confirmed the site is near the village of Hanoverton. The $900 million project is expected to be rolled out over five years, with the first portions of the complex scheduled to be in service by June 2013.

Chesapeake spokesman Pete Kentworthy was contacted by the newspaper on Wednesday to obtain further details about the project, such as the exact location and the number of jobs it would create, and he said that information would be made public at the appropriate time. For now, the company was letting Tuesday's news release speak for itself.

The complex will serve as a collection and compression site for natural gas extracted from shale formations by various drillers. The complex will also process shale gas, including extracting natural gas liquids (NGL) such as propane, butane and ethane for other uses. The NGLs will be piped to a separate $500 million storage and transfer facility being built in Harrison County by another company.

Drake said it is his understanding the complex will be built on 160 to 170 acres Chesapeake already has under lease in the Hanoverton area. "They briefed us about a month ago and asked us to stay quiet on it, which we have done," he said.

Drake believes Chesapeake wants to move quickly to stay ahead of the competitors, some of whom were interested in building a gas-processing complex in the county.

"In a sense, it's a refinery," he said of the complex, "but it is not a cracker plant."

Royal Dutch Shell is considering building a $3.2 billion ethane cracker plant in Ohio, West Virginia or Pennsylvania, creating an estimated 12,000 jobs. Drake said a cracker plant takes NGLs extracted from shale gas and converts them into other materials used in plastic.

Drake said there would not be as many jobs as you would expect at the Hanoverton complex because "this will be a very efficient and modern plant. So if it had 100 to 150 employees, I think that would be the maximum, although they would be good paying jobs."

One thing that sets Chesapeake apart from other companies is they never asked for any government assistance. "They didn't ask for anything. That's very unusual, but that's the nature of this industry," where gas companies need to move fast instead of being encumbered waiting for government funding, Drake said.

"The other thing about Chesapeake is if they set out to do something, they tend to accomplish it," he added.

Chesapeake's Midstream Development is the majority investor in the Hanoverton project, and the M3 Midstream LLC and EV Energy Partners LP are the other partners with a stake in the project. The three companies have more than 2 million acres under lease for drilling in Ohio.

The Associated Press contributed to this story.



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