More natural gas pipelining and processing infrastructure is headed to Belmont County, as PVR Partners will build a 45-mile pipeline for New York City-based Hess Corp.
The $125 million project is the latest venture to transport methane, propane, butane and ethane from eastern Ohio's Utica Shale.
"We believe Hess's selection of PVR as their midstream provider in the Utica Shale is another validation of our growing reputation for supplying reliable, high-quality midstream services to meet the needs of shale gas producers. We have done so successfully in the Marcellus Shale region, and we expect to duplicate that success in the Utica Shale," said Bill Shea, president and chief executive officer of PVR.
According to the agreement, PVR will build a minimum 20-inch diameter trunk line with an expected minimum capacity of 450 million cubic feet per day and connections to the Texas Eastern and Rockies Express interstate pipelines.
PVR will also build gathering lines, compression stations, dehydration facilities and other related facilities to gather Hess's production from the dedicated acreage. The project is expected to begin operations in late 2014. PVR may look to other producers to see if the company can provide transportation services to them.
Hess initially entered the eastern Ohio Utica Shale play in 2011 by paying $750 million to acquire rights from Marquette Exploration. Since then, Hess, Gulfport Energy, Antero Resources, Rice Energy, Chesapeake Energy, XTO Energy and other companies have continued signing leasing contracts throughout the area, some of which have offered mineral owners more than $6,000 per acre.
Ohio Department of Natural Resources records show Hess holds the permit for the Lude well that has been flaring recently. The Lude well is still in its early stages, so Hess does not yet have any reporting information for it, but the company has reported some results from eastern Ohio wells.
Generally, throughout the Marcellus and Utica shale formations, the farther east one drills for gas, the more likely this gas is to be of the dry type. As drillers move their operations toward the west, they are more likely to find the liquids-rich wet gas - which, in addition to the dry methane gas, contains valuable ethane, propane and butane.
According to the National Geophysical Data Center, flaring is a widely used practice for the disposal of natural gas in areas where there is no infrastructure to make use of the gas. These officials believe the practice unloads unnecessary amounts of carbon emissions into the atmosphere.