Western Reserve Petroleum Leases 4,500 Marcellus Shale Acres in Eastern Ohio in Last Two Weeks

Western Reserve Petroleum has just snapped up lease rights to 4,500 acres in the past few weeks in Jefferson and Harrison Counties in eastern Ohio, located close to the border of West Virginia and not far from Pittsburgh, a prime Marcellus Shale region.

With one company locking up about 4,500 acres for oil and natural gas exploration over the past two weeks, Jefferson County property owners appear to be getting their own taste of the Marcellus Shale rush.

While companies such as Chesapeake Appalachia, A B Resources, CNX Gas Corp., Dominion Exploration and others are gobbling up property rights in West Virginia, Western Reserve Petroleum is quickly staking its claim to the oil and gas rights in eastern Ohio.

“It has taken us less than two weeks to acquire 4,500 acres in Jefferson and Harrison counties,” said Molly Johnson Phillips, lease acquisition manager for Western Reserve. “We are glad to give some smaller landowners a chance to get in on this.”

Western Reserve is not disclosing how much they are paying for the leases. Recent deals just across the border in West Virginia have seen a signing bonus of $3,600 per acre and royalty payments between 12 and 19 percent.

*The Intelligencer/Wheeling News-Register (May 30) – Gas Rush On In Jefferson

Marcellus Shale Ethane Headed to the Gulf Coast in a New Plan from MarkWest and Sunoco

MarkWest Liberty Midstream is partnering with Sunoco Logistics to use existing and new pipelines in a project that will take Marcellus Shale gas liquids (ethane) from the northeast all the way to the Gulf Coast. How’s that for a change?! Ethane is primarily used in manufacturing plastics and is one of the by-products obtained from processing shale gas methane. Range Resources and Chesapeake Energy are among the major Marcellus Shale producers who are supporting the project and will sell processed ethane using the new system offered by MarkWest and Sunoco Logistics. Part of the project includes constructing a new 45-mile pipeline from Houston, PA to Delmont, PA. The ethane arriving at Delmont will then be piped to the East Coast, and from there it will go by ship to the Gulf Coast.

From the official press release:

MarkWest Liberty Midstream & Resources, LLC, a partnership between MarkWest Energy Partners, L.P. and The Energy & Minerals Group, and Sunoco Logistics Partners L.P. today announced a combined pipeline and marine project for ethane produced in the Marcellus Shale Basin. The Mariner Project is anticipated to have initial capacity to transport up to 50,000 barrels per day of ethane to Gulf Coast markets as soon as the second quarter of 2012 and could be scaled to transport higher volumes to support additional ethane production in the Marcellus region. MarkWest Liberty has been working with key producers and petrochemical consumers since late 2009 and the project is supported by key producers including Range Resources Corporation and Chesapeake Energy Corporation.

The Mariner Project includes MarkWest Liberty making minor modifications to its processing facilities to recover sufficient ethane to allow the residue gas to meet interstate gas pipeline specifications and installing additional facilities at its Houston, Pennsylvania processing and fractionation complex to separate the ethane for delivery to downstream Mariner Project facilities. MarkWest Liberty will also construct a 45-mile pipeline from the Houston complex to an interconnection with an existing Sunoco Logistics pipeline at Delmont, Pennsylvania. The ethane will be transported to an existing East Coast facility where Sunoco Logistics will construct refrigerated ethane storage facilities. The ethane will then be transported via marine vessel to premium markets in the Gulf Coast. In addition, the existing Sunoco Logistics pipeline crosses many of the large pipelines transporting natural gas into the northeast, which will provide multiple ethane blending options.

“We are excited to be able to participate in the Mariner Project and we are especially pleased to partner with MarkWest Liberty due to their extensive experience in the Marcellus Shale Basin,” said Deborah M. Fretz, President and Chief Executive Officer of Sunoco Logistics. “Our existing Pennsylvania active and idle pipeline infrastructure is well-positioned to provide an efficient solution for producers to move ethane across Pennsylvania to a Delaware River marine port to access multiple markets. The combination of MarkWest Liberty’s fractionation complex and Sunoco Logistics’ transportation system offers producers a higher value for their natural gas liquids by transporting only the ethane portion of the liquids and allowing the heavier liquids to remain in the northeast marketplace.”

Frank M. Semple, Chairman, President and Chief Executive Officer of MarkWest stated, “We have been working with Sunoco Logistics and our producer customers for a number of months and we believe the Mariner Project provides the most efficient solution to maximize the value of Marcellus ethane, supports the development of more than 2 BCF per day of Marcellus rich gas, and significantly accelerates the in-service date to transport ethane compared to other pipeline projects. MarkWest and The Energy & Minerals Group are very pleased to partner with Sunoco Logistics because of their strong set of assets and significant experience in the storage and transportation of liquefied petroleum gas.”

*Businesswire (June 1) – MarkWest Liberty Midstream & Resources and Sunoco Logistics Announce New Marcellus Ethane Pipeline and Marine Project