Big Economic Impact of Midstream Projects in OH & PA

A pair of stories about how the midstream is transforming western Pennsylvania and eastern Ohio recently ran in the Youngstown, OH The Business Journal. Midstream refers to the infrastructure that gets natural gas to market, including pipelines and processing plants. Right now and for the foreseeable future, spending on midstream projects in Ohio is likely larger, from an economic impact standpoint, than exploration and production.

M3 Midstream, Chesapeake Midstream Partners LP and EV Energy Partners are planning a $900 million pipeline and processing infrastructure project that calls for the construction of two new processing plants – one in southern Columbiana County, the other in Harrison County.

[Frank Tsuru, president and CEO of M3 Midstream/Momentum] says the system is designed so it could accommodate new demand, which in turn opens the potential for more processing plants as development moves north. “It’s very possible that we’ll have additional processing up there,” he says. “We’ve designed this whole system to be very modular and scalable, and we could just keep adding on processing and fractionation systems.”

The impact could be so profound that, in two years, more than $1 billion in wages could be in workers’ wallets as a result of midstream development in this region, much of it resulting from the Chesapeake venture.

“The midstream build-out is going to be huge here,” Tsuru says.(1)

The impact of the midstream is also huge in Pennsylvania. Shell recently said they will likely build an ethane cracker plant in Beaver County, PA, a massive project that will cost upward of $3 billion. But even before that project gets underway, the midstream is already an important part of PA’s economy:

Four years ago, the hillside along state Route 519 in Chartiers Township, Pa. was packed with dense forest, Terry Frieseo recalls. Within several months, that forest was gone and the hillside cleared and landscaped. Truck traffic along the route increased dramatically, and work started in earnest on a massive, $200 million processing plant for the natural gas industry.

"I’ve seen this grow from nothing over the last four years," says Frieseo, a retired firefighter who helps maintain a safety-training site across from the plant — a sprawling, 50-acre complex operated by MarkWest Energy Partners LP. The plant is capable of gathering hundreds of millions of cubic feet of natural gas per day and processing that gas for the energy market. "A lot of jobs have come this way. There’ll be a lot more, too, when it’s all over."

The MarkWest plant is the single largest investment in Washington County since the gas rush began nearly five years ago in this section of southwestern Pennsylvania. While drilling rigs have come and gone, and construction activity ebbs and flows related to these operations, plants such as MarkWest’s demonstrate the industry’s long-term commitment to the region, officials say.(2)

(1) Youngstown (OH) The Business Journal (Apr 2, 2012) – Midstream Gas Processors Poised to Transform Region

(2) Youngstown (OH) The Business Journal (Apr 2, 2012) – Gas Processors Reshape Washington County, Pa.