Kane Borough Sewer Authority Making Money from Selling Effluent to Marcellus Shale Driller

Kane Borough Sewer Authority in McKean County, Pennsylvania is planning to sell (sell!) sewer effluent to Seneca Resources for drilling gas wells. Seneca is the oil and gas drilling division of National Fuel Gas Company. Effluent is the treated water discharged from sewage treatment plants.

According to a report given by Phil Lingenfelter, the foreman for the [Kane Borough] sewage treatment plants, more than 700,000 gallons of effluent is discharged daily from the two plants in “dry weather.”

Jim Salvamoser, chairman of the five-member authority, endorses the plan to sell the effluent to Seneca Resources.

“I think it’s a good idea,” Salvamoser said Monday. “It may give us a good source of revenue.”

Lingenfelter said he still is talking with Seneca about the proposal. He said a price for the effluent has not been set. He said the state Department of Environmental Protection (DEP) has been made aware of the proposal and has not ruled against the effluent sale.

“DEP thinks it’s a great idea,” he told the authority.*

Seneca has already drilled one gas well in the area and is now drilling another, with plans to drill more wells in the near future.

There are many municipal sewage treatment facilities located throughout the northeast and mid-Atlantic in the Marcellus Shale. Perhaps some other enterprising managers can tap this new revenue source for their cities and towns.

*Kane Republican (Mar 16) – Kane plans to sell sewer effluent for well drilling

PVR Midstream Building New Pipeline and Compression Facilities in Wyoming County, PA

From a Penn Virginia Resource Partners press release issued today:

The midstream division of Penn Virginia Resource Partners, L.P. (NYSE: PVR), PVR Midstream, announced today that it has entered into an agreement to construct and operate gas gathering pipelines and compression facilities servicing a private firm’s Marcellus Shale natural gas production in Wyoming County, Pennsylvania.

PVR Midstream will construct a 12-inch gathering pipeline and compression facilities with 25 million cubic feet (MMcf) per day of throughput capacity. This system is expected to become operational during the second quarter of 2010, with the potential for additional system extensions.

PVR Midstream’s 2010 capital investment in this system is anticipated to range from $6 to $7 million, with potential future system extensions costing up to $10 million. PVR Midstream expects its investment to be accretive to distributable cash flow once the system is operational.

See the full press release (Mar 16): Penn Virginia Resource Partners, L.P. Announces Gathering and Compression Agreement with Private Producer in the Marcellus Shale

Energy Companies in PA Must Now Disclose Gas Well Production Numbers Every Six Months

Faster disclosure of gas well production data is coming to Pennsylvania. On Tuesday, March 16 the PA Senate passed a bill already passed by the PA House that would force drilling companies to disclose gas well production data every six months. The existing law, passed 25 years ago, allows drillers to keep production numbers secret for five years. No more. Gov. Ed Rendell has said he will sign the new measure into law.

What does it mean for landowners in PA? You’ll now have access to the numbers to ensure your royalty payments are timely—and accurate.

For more, see: Binghamton Press & Sun-Bulletin (Mar 16) – Pa. to reveal drillers’ secrets in gas shale rush

Atlas Energy Talking to Reliance Industries About Marcellus Shale Partnership – Billion Dollar Deal in the Making?

As MDN reported on Feb. 24, Atlas Energy is looking for a partner to help fund its operations in the Marcellus Shale. They may have found one, Indian energy giant Reliance Industries:

Reliance Industries Ltd., the owner of the world’s largest fuel-making complex, is in talks with Atlas Energy Inc. to invest in the U.S. natural-gas producer’s shale assets, a person familiar with the negotiations said.

The talks between Reliance, controlled by Indian billionaire Mukesh Ambani, and Moon Township, Pennsylvania-based Atlas are in preliminary stages, the person said yesterday, asking not to be identified because the discussions are private.*

The deal is likely to be worth several billion dollars, if recent deals are any indicator: CONSOL’s impending purchase of Dominion’s Marcellus Shale operations for $3.475 billion; Mitsui’s investment of $1.4 billion in Anadarko earlier this year; and Statoil’s investment of $3.4 billion in Chesapeake last year. If the Reliance/Atlas deal pans out and fetches the same rate of $14,000 per acre investment that the Mitsui/Anadarko deal did, it would be a $3.7 billion deal—the largest Marcellus deal yet.

*Bloomberg (Mar 16) – Reliance Said to Be in Talks With Atlas to Buy Shale Gas Assets