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Plan calls for shipping oil, gas by barge

October 11, 2012
Morning Journal News

WELLSVILLE - A firm whose parent company is active in the regional shale gas boom intends to become part of Marathon Petroleum Corp.'s proposed expansion into the Columbiana County Port Authority industrial park.

Marathon issued a news release Tuesday announcing it had signed a letter of intent with the Harvest Pipeline Co. to jointly develop a transfer system at the industrial park to ship oil and gas from the Utica shale fields in the region by barge.

Marathon has a storage tank/transfer facility next to the port authority's industrial park located on the Ohio River at the southern end of Wellsville. Several months ago, Marathon purchased 3.6 acres of port authority property, which will be developed into a staging area for trucks transporting oil and gas collected from area wells, with a pipeline transferring the materials to its storage tanks next door.

Harvest is apparently going to lease the port authority property acquired from Marathon and operate the transfer system. According to the news release, the expansion includes modifying the river terminal "to accommodate the additional volume for loading onto barges, and a new truck rack to be built on the property leased by Harvest Pipeline next to the (Marathon) facility."

Harvest operates a network of pipelines, plants and terminals across south Texas and Louisiana. The company is an affiliate of Hilcorp Energy Co., a leading oil and gas producer that has recently become increasingly active in leasing acreage in Ohio's Utica shale, especially in Mahoning County.

When completed by the end of 2013, the Wellsville facility will be capable of unloading 24,000 barrels per day from trucks, with the terminal able to load up 50,000 barrels per day onto barges bound for refineries.

"With two of our refineries literally on top of the Utica shale formation, we are committed to positioning ourselves as the customer of choice for liquids production from the Utica," said George Shaffner, Marathon's senior vice president of transportation and logistics.

Shaffner also said in the news release that the deal with Harvest Pipeline represents Marathon's second major investment in regard to Utica shale play, with the other being an expansion of the truck-handling capacity at its Canton refinery.

Port CEO Tracy Drake was obviously pleased with the news of Harvest/Hilcorp's involvement in the Marathon project.

"These are two significant players in the industry and it bodes well for Columbiana County," he said.



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