Chesapeake Continues Construction in Ohio

ST. CLAIRSVILLE – Chesapeake Energy is continuing to expand its Ohio operations with new office buildings at Fox Commerce Park near St. Clairsville and a $900 million natural gas processing complex in the works for Harrison and Columbiana counties.

The driller, which leads West Virginia’s Northern Panhandle in natural gas activity, is also becoming a major player in the Buckeye State. This is because of the valuable ethane, butane, propane and pentane that can be found in the Utica Shale underlying most of eastern Ohio.

Construction workers are now erecting the buildings at Fox Commerce Park, west of St. Clairsville near the new Belmont County Fairgrounds. The office is on schedule to open by November, said Chesapeake spokesman Pete Kenworthy. Because the buildings will be located at the front of the industrial park – across from the FedEx structure at Fox Commerce – they should be viewable by those driving along Interstate 70.

Belmont County commissioners voted last year to allow the Fox Commerce land to be sold from the the county’s Community Improvement Corp. to Chesapeake. Sue Douglass, Belmont County Community Improvement Corp. and Department of Development director, said at the time the land would be for some sort of office for Chesapeake. The company paid the county $300,000 for roughly 30 acres of land at the park.

“The field office buildings will house both Chesapeake Operating Inc. and Chesapeake Oilfield Services,” said Chesapeake Director or Corporate Development Keith Fuller.

According to the company’s website, Chesapeake Oilfield Services is the subsidiary of Chesapeake responsible for “renting tools and hauling water to pressure pumping and contract drilling.” The oilfield services affiliates include Compass Manufacturing, Great Plains Oilfield Rental, Hodges Trucking, Keystone Rock & Excavation, Nomac Drilling, Oilfield Trucking Solutions and Performance Technologies.

Employees wearing hard hats working under the Nomac banner are visible at many Chesapeake well sites throughout the Ohio Valley.

As the Belmont County office complex takes shape, Chesapeake is also continue to lease land for drilling throughout eastern Ohio. The company has already drilled several wells throughout the state, with one Harrison County well yielding 1.52 billion cubic feet of natural gas and 13,472 barrels of oil in 2011, according to the Ohio Department of Natural Resources.

Chesapeake will partner with M3 Midstream and EV Energy Partners to build $900 million worth of natural gas gathering and compression facilities in Harrison and Columbiana counties. The massive project is supposed to be open by the middle of next year.

According to a map on the M3 website, it appears the Harrison County portion of the complex would be built near Scio.

And the Columbiana County part of the complex would be located near Hanoverton, Ohio.

In natural gas processing, the “dry” methane part of the gas stream is separated from the “wet” portions, like ethane, butane, propane and pentane. During fractionation, the natural gas liquids and other substances are separated from each other. These separated gas products are then ready for use, with the ethane possibly going to a cracker plant.

Chesapeake announced plans earlier this year to shift much of the company’s focus from drilling in the methane-dominated dry gas regions in much of Pennsylvania, to drilling in the wet gas. This is due to relatively low natural gas prices compared to the price commanded by natural gas liquids.

Companies such as Chesapeake, Chevron and XTO Energy are known in the industry as “producers” because these companies sell the gas they pump out of the ground. Because the “wet” Marcellus and Utica shale gas requires processing before it can go to market, producers send their gas to companies such as Dominion Resources, Williams Partners, MarkWest or M3 for processing and fractionation.

The processing facility to be located in Columbiana County will have an initial capacity of 600 million cubic feet per day. Natural gas liquids will be delivered to a central hub complex in Harrison County that will feature an initial storage capacity of 870,000 barrels.

The Harrison County facility will also have fractionation capacity of 90,000 barrels per day, as well as a substantial rail-loading facility, according to Chesapeake.