EAST LIVERPOOL - The Columbiana County Port Authority acted Monday to help Marathon Petroleum expand its Wellsville operations and bring a similar company to the village that also intends to take advantage of the shale gas boom under way in the region.
First, the Port Authority board approved a memorandum of understanding to sell 3.6 acres to Marathon for a lump-sum payment of $2.4 million. The property is part of the Port Authority's riverfront industrial park in Wellsville, which is located next door to Marathon's storage tank/ transfer facility.
Port Authority CEO Tracy Drake said the proposed purchase is reflective of Marathon's efforts to become a bigger player in the regional oil and gas boom. The Port Authority property will be used as a staging area for trucks transporting oil and gas collected from local wells, with a pipeline to carry the material from the parking area to Marathon's 2.5 million gallon twin storage tanks.
"It will be basically a truck facility," Drake said.
The deal allows truck traffic to go directly from state Route 7 to the Port Authority, bypassing residential neighborhoods currently used to access Marathon property.
"It will eliminate the 200 to 400 trucks that will come to the site for that purpose from driving through public streets," he said.
According to the memorandum of understanding, which still has to be reduced to contract form and approved, the Port Authority will apparently be required to purchase several additional parcels of property as part of the deal.
The board also agreed to lease 22 acres at its Wellsville industrial park to Houston-based Arrowhead Utica Pipelines, which intends to build a gas-transfer facility on the site similar to Marathon. In return, the Port Authority would be paid $5 million.
Arrowhead plans to make a $20 million to $30 million investment in the property and create 30 to 50 jobs, Drake said. The lease will be for 99 years.
The property had been under lease to Rosebud Mining for use as a coal storage and transfer site, but the company agreed to assign its lease to Arrowhead. "Rosebud wants out as a coal site. Coal has pretty much been killed," Drake said.
The Port Authority would have been paid a total of $10 million by Rosebud over the remaining 43 years of its lease, but Drake said the board believed getting an up-front payment of $5 million from a company prepared to utilize the property immediately was a better deal.
"We're probably giving them a discount, but that's OK," he said.