Noble, Consol Move Ahead With CONE Development

As Noble Energy and Consol Energy continue fracking their way through Marshall County’s Marcellus shale formation, the companies are moving forward with plans to develop their own natural gas processing company known as CONE Gathering.

Officials with Noble and Consol said their companies submitted registration forms to the U.S. Securities and Exchange Commission with intentions to hold an initial public offering of stock for their master limited partnership. According to the companies, once the stock is offered, the MLP would own, operate and develop the assets now jointly owned by Noble and Consol.

Noble is an active Marcellus shale gas producer in Marshall County that partners with Consol to drill and frack wells. West Virginia Department of Environmental Protection records show Noble has multiple wells throughout the county located on property in the name of Consol. In the Marcellus shale region, Noble’s core operational and exploratory area is in Marshall, Tyler, Doddridge, Gilmer and Ritchie counties in West Virginia and Washington and Greene counties in Pennsylvania.

If CONE proceeds to develop its own midstream infrastructure, this would add to the billions of dollars already invested in Marshall County to process and transport natural gas.

At processing plants, midstreamers separate the methane from the other substances so that the methane can be sold by utility companies. The fractionation facilities separate the liquids from each other so the products can be marketed individually.

Representatives of both Noble and Consol said they could not provide additional information. However, R. Dennis Xander, past president of the Independent Oil and Gas Association of West Virginia, said CONE has a right-of-way to build a large diameter pipeline and a parallel waterline from Barbour County to Upshur County in central West Virginia.

“The right-of-way was acquired and cleared over a year ago. We all expected them to commence construction last summer/fall,” Xander said of CONE.

Emphasizing that he does not know the cost of the CONE project, Xander said he believes similar pipelines could cost at least $1 million per mile to build across West Virginia’s rugged terrain.

“I have speculated that they have delayed the start of construction due to the historic ‘chicken and egg’ dilemma: Do you build a line before you prove up reserves, or do you drill wells to prove reserves without knowing if there is available pipeline capacity?” Xander said. “A gas well with no pipeline isn’t worth much.”