Good Progress on MarkWest’s Cadiz, OH Processing Plant

MarkWest’s Cadiz, Ohio natural gas processing plant has been online since last year and currently separates handles 60 million cubic feet of gas per day (Mmcf/d), separating out gas liquids like ethane, propane, butane and pentane. MarkWest is busy building an expansion of the plant that, when done, will add an additional 125 Mmcf/d of capacity.

An update on MarkWest’s $1.8 billion infrastructure projects under way in Ohio this year:

The construction sites bustle with activity daily as MarkWest Energy works to complete $1.8 billion worth of natural gas processing and fractionation infrastructure across Ohio’s Utica Shale field.

Denver-based MarkWest – which also has operations in the West Virginia and Pennsylvania Marcellus Shale – is working to complete all phases of its processing plant near Cadiz, just south of the village along Ohio 9. The Cadiz site now has a 60 million cubic feet per day gas refrigeration facility in operation. It will soon feature a cryogenic processing plant to process an additional 125 million cubic feet of gas per day.

These Cadiz facilities will be connected by pipeline to the under-construction fractionator near Hopedale, which was the destination of the "superload" tank that made its way through Steubenville April 7.

MarkWest also processes gas at the Mobley site in Wetzel County and the Majorsville complex in Marshall County, working for producers such as Magnum Hunter, Consol Energy, Noble Energy and Range Resources.

Construction and Customers

Kevin Hawkins is not sure when the next MarkWest superload will make its way through the Upper Ohio Valley, but as the company’s investor relations manager, he said roughly 3,000 people are now working in Ohio because of MarkWest. Most of these are construction workers who are building the company’s vast network of pipelines, as well as the processors and fractionators.

Hawkins said the Utica Shale "has a lot of potential," noting drillers have shown strong results in Belmont and Harrison counties.

MarkWest has contracts to process gas for Gulfport Energy, Antero Resources, Petroleum Development Corp. and Rex Energy.

Companies such as Gulfport, Chesapeake Energy, 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 "midstream" companies such as Dominion Resources, Williams Partners or MarkWest for processing and fractionation.

The Gulfport gas that MarkWest is processing is abundant, as a single well near Barnesville could be producing as much as $100,000 worth of revenue per day.

Also, Gulfport’s Clay well, located in the area of U.S. 22 and Ohio 800, near the northern portion of Piedmont Lake in Harrison County – has produced fairly large quantities. These wells are in addition to Gulfport’s "monster" – as labeled by energy investment firm Global Hunter Securities – Shugert well that yielded as much as 28.5 million cubic feet of gas per day from the Egypt Valley area near Morristown.

MarkWest is able to complete these projects, in part, because of its agreement with the Energy & Minerals Group, which is contributing $950 million to the cause.

According to company information, the Energy & Minerals Group is a private firm that focuses exclusively on investing in natural resources its members believe are integral to the global economy.

Process and Future

According to MarkWest, the Cadiz processing complex will include a de-ethanization facility that will remove ethane from the gas stream, which will flow to the plant via the growing pipeline network. The ethane will then be placed into the ATEX Express ethane pipeline, which will transport the product from the Utica and Marcellus regions to the Gulf Coast for cracking.

The propane, butane and other, heavier natural gas liquids will flow via pipeline from Cadiz to the Hopedale fractionator for further separation so that all products can be marketed individually.

According to www.naturalgas. org, "Fractionation works based on the different boiling points of the different hydrocarbons in the NGL stream. Essentially, fractionation occurs in stages consisting of the boiling off of hydrocarbons one by one."

Although Hawkins is not sure how many full-time workers will be needed to operate the plants when they are complete, he said MarkWest will continue to employ people at the facilities once they are built. He said the plants typically require 10-15 employees.

"As long as this infrastructure is well-maintained, it can last a long time," Hawkins added when asked how long the plants could remain in operation.

MarkWest also now maintains an office along Main Street in Cadiz. Across the street, the Harrison County Courthouse is busy because abstractors are searching through property records in an effort to lease land for drilling.*

    *Martins Ferry (OH) Times Leader (Apr 15, 2013) – MarkWest projects making progress