2 New Gas-to-Liquids Plants Coming to Jefferson County, OH

Future site of Orin petchem complex (click for larger version)

A “locally organized industrial development company”–called Orin Holdings–says it will build two state-of-the-art gas-to-liquids plants on a 500-acre parcel in Saline Township in Jefferson County, OH. Orin says (in so many words) this isn’t your father’s old refining complex. This is something brand new and better. “It will operate more cleanly and efficiently than any plant of its kind, utilizing state-of-the-art instrumentation and controls technology to fully comply with today’s stringent environmental and safety requirements.” The plants will be fed by Marcellus and Utica ethane.
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Steubenville, OH in the Catbird Seat – Between Two Crackers

Location of Steubenville, halfway between Monaca, PA and Dilles Bottom, OH

Several weeks ago MDN editor Jim Willis attended the 2019 Northeast Petrochemical Conference and Expo in Pittsburgh. A major reason for attending such events is to connect with others in the industry. On this trip, Jim had the pleasure of meeting and talking with Bryce Custer, business director for global commercial real estate company NAI’s Ohio River Corridor division. Bryce’s job is to find real estate for companies in places where maybe real estate isn’t (yet) for sale. Companies like manufacturers who want to locate near the Shell and (soon, hopefully) PTT ethane cracker facilities–looking to locate in the Ohio River Valley. Bryce helps them find suitable locations. Bryce recently spoke to the Steubenville Revitalization Group and had an interesting observation about Steubenville’s geography.
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Jefferson County, OH the New Darling for Utica Drillers

Location of Jefferson County, OH

Early in the development of Ohio’s Utica Shale, drillers like Aubrey McClendon (Chesapeake Energy at the time) targeted Ohio counties like Carroll and Columbiana, in the “northern” part of the Utica play. It didn’t take long for drillers to figure out the “core” of the play where the most oil and gas can be found is in the south, in counties like Harrison, Belmont, Monroe, Noble and Guernsey. Jefferson County sort of straddles both the northern and southern parts of the Utica and was left out. Not any more.
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EnCap Looks to Sell Royalty Stake in “Core” of Ohio Utica

EnCap Investments is a venture capital investor that funds independent companies in the U.S. oil and gas industry. EnCap has its fingers in a number of pies in the Marcellus/Utica. EnCap is the major investor behind Eclipse Resources and was instrumental in Eclipse selling itself to and merging with Blue Ridge Mountain Resources (see Eclipse Resources Merging with Former Magnum Hunter). EnCap is also a major investor in (i.e. owner of) PennEnergy Resources, which recently cut a deal to buy Rex Energy (see Rex Energy Sells Itself to PennEnergy Resources for $600M). Another way EnCap invests in our region is by funding drilling programs in return for royalty payments (or more properly, for a thin slice of the royalties). EnCap has put their royalty interests in several “core” Utica Shale counties up for sale.
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3 Counties, 5 Drillers Led OH’s 50% Increase in 2Q Gas Production

The Pareto Principle is alive and well in the Buckeye State. You may know it as the 80/20 rule, or in this case, the 75/25 rule. The rule that states roughly 80% of the results come from 20% of the effort. Last week MDN brought you the latest update from the Ohio Dept. of Natural Resources–their second quarter 2018 report showing all production coming from the Ohio Utica Shale (see Top 25 Producing Gas & Oil Wells in Ohio Utica for 2Q18). While MDN provided you with Top 25 lists showing the best-performing wells (both gas and oil) during 2Q, and while we provided you with a better spreadsheet to view the information than that provided by the ODNR itself, our analysis was basic and high level. Utica natgas production was up a big 42% over the same period last year, and Utica oil production was up 11%–a cumulative 50% increase when you convert it all into equivalents. The experts at S&P Global Platts have done a deep dive into the numbers and have found that three counties represent 75% of all production in 2Q18, and five drillers represent 75% of all production in 2Q18. Which counties and which drillers? Read on…
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FERC Finally Approves 2 Key Rover Pipeline Laterals, Sept 1 Start

The Federal Energy Regulatory Commission (FERC) game of hardball with Energy Transfer over the Rover Pipeline has finally paid off. For months FERC has refused to allow four Rover laterals–feeder pipelines to shuttle gas from where it’s produced into the main Rover pipeline–to start up (see FERC Plays Hardball with Rover – Refuses to Certify 4 Laterals). The reason? ET has not, according to FERC, lived up to its word on restoration work. Things like smoothing over the dirt and replanting grass and other vegetation over top of the buried pipeline. Earlier this month ET assured FERC it would have the majority of restoration work done on two key laterals–the Burgettstown Lateral in southwestern PA, and the Majorsville Lateral in the northern panhandle of WV–by the end of this month (see FERC Continues to Block Rover Laterals Until Restoration Work Done). With recent evidence that ET is indeed living up to its word, last Thursday FERC gave ET permission to start up both the Burgettstown and Majorsville Laterals on Sept. 1. The majority of the restoration work will be done by this Friday, Aug. 31. However, there will still be some odds and ends after that (addressing “ground movement areas) that will go on through December. That leaves two final laterals–the CGT (Columbia Gas Transmission) and Sherwood Laterals, still not online. This is a prime example of FERC playing hardball, contrary to the “rubber stamp” antis claim FERC is for pipeline companies…
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FERC Approves New Connection to Rover Lateral, but Not the Lateral

Yesterday the Federal Energy Regulatory Commission (FERC) granted a “certificate of public convenience and necessity” (i.e. official approval) for Rover Pipeline to spend $4.7 million to build a new meter station along Rover’s Burgettstown Lateral. The new meter station, to be located in Jefferson County, OH, will connect a pipeline gathering system built and maintained by Utica Gas Services LLC, connecting the gathering system to Rover. The new connection will flow 350 million cubic feet per day of Utica Shale gas into the Rover pipeline system. But here’s the thing: FERC has not yet given Rover permission to begin flowing gas along the Burgettstown Lateral. FERC is playing hardball, withholding permission for Burgettstown and three other laterals until Rover (i.e. Energy Transfer) gets restoration work done along certain portions of the project (see FERC Continues to Block Rover Laterals Until Restoration Work Done). Obviously FERC is planning to let Burgettstown and the other laterals go online, it’s just a matter of time. But FERC is using the laterals (withholding startup) as leverage to make Rover do what it said it would do. Below is more information about UGS-Crawford Meter Station, as it’s called, and FERC’s approval of it…
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OH Town Threatens to Sue Ascent Resources re Road & Lease Issues

The mayor of Bloomingdale, OH, in Jefferson County, wants Ascent Resources to “come to the table for more fair arrangements on leases, road use agreements and fixing already-damaged roads.” The mayor and the village council are threatening to sue Ascent if they don’t “come to the table.” In other words, pay up or else. What has Ascent done to anger the mayor and village? Primarily the issue involves RUMAs–road use maintenance agreements. Some roads the village says Ascent uses have been damaged and the village wants them fixed. They also want a new agreement in place to pay for more fixes in the future. The mayor also says Ascent is using pressure tactics in leasing land from village residents. Some one-third of the village is now leased. These problems have been going on for about a year now, and the situation seems to be coming to a head…
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Ascent’s $1.5B OH Utica Deal Yields $1.4M in Fees for 2 Counties

In late June Ascent Resources, a company founded by Aubrey McClendon after he left Chesapeake Energy, announced it is buying 113,400 Utica Shale acres along with 93 operating wells located in eastern Ohio for $1.5 billion (see Ascent Resources Spends $1.5 Billion to Buy OH Utica Acreage, Wells). It’s a big deal, making Ascent one of the largest privately owned exploration and production companies in the U.S. It’s also a big deal for the counties where the land is changing hands. A large part of the acreage is located in Jefferson County, with sizable chunks in Belmont, Noble and Harrison counties. Why is it a big deal for the counties? It takes time (and consequently fees) to transfer all those thousands of leases from one owner to another. Counties stand to make a big windfall. For example, in Jefferson County, some $305 million worth of transfers will take place between CNX and Ascent, netting the Jefferson clerk’s office $1.2 million in fee revenue! It is the single largest ownership transfer in Jefferson County history. In neighboring Belmont County (to the south of Jefferson), $58 million worth of transfers are taking place, netting the county $173,000 in transfer fees. No word yet on how much money Noble and Harrison stand to make…
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Top 3 Most-Drilled Counties in Ohio Utica for 2017

If you look at the number of Utica wells drilled in 2017, Belmont, Monroe and Jefferson counties were the top 3 counties in the state for new Utica wells drilled. However, if you dig a little further, you’ll find that two of those three counties saw more wells drilled in 2017 than in 2016, while one of them saw a 45% drop in new wells drilled in 2017–indicating that county has “fallen out of favor,” at least to some extent. Which is which? For that, you have click to continue reading…
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Rover Pipeline’s SWPA Burgettstown Lateral Ready for Startup

Click map for larger version

On Tuesday, Rover Pipeline (Energy Transfer Partners) sent an official request to the Federal Energy Regulatory Commission (FERC) asking for permission to begin service on one of the remaining legs of the pipeline not yet up and running as part of Phase 1 development. Rover wants to begin service on the Burgettstown Lateral by Feb. 26. The Burgettstown Lateral (see the map below) extends from Burgettstown (Washington County), PA through Hancock County, WV and into eastern Ohio, connecting to the main Rover Pipeline in Carroll County. The Burgettstown Lateral is 51.3 miles long and includes a compressor station in/near Burgettstown to push the gas along the entire length of the lateral. Rover still maintains they will have the entire Rover Pipeline network up and running by the end of March. There are still some areas in Ohio where they are working (drilling for a second pipeline under the Tuscarawas River), however, most of the work remaining to be done is in Michigan–Phase 2 of the project. When it’s all done, up and running, Rover will flow 3.25 billion cubic feet per day of Marcellus/Utica gas to the Midwest, Gulf Coast and Canada. Below is Rover’s request to “start me up” for the Burgettstown Lateral, along with a map of the lateral…
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Utica Leasing Takes Off in Jefferson County, OH – Bonus $6K/Acre

In early June, MDN brought you the news that officials with Ascent Resources (formerly American Energy Partners) and Chesapeake Energy said their respective companies are putting a renewed focus on Jefferson County, OH in the coming months (see Uptick in Utica Drilling Predicted for Jefferson County, OH). We have some evidence that their words are becoming actions. MDN pulled the list of requests to drill new horizontal wells in Jefferson for Jan 1 – Jun 29 from the Ohio Dept. of Natural Resources’ website. Indeed, we found 19 such permit requests, most of them from Ascent and a few from Chesapeake (see the chart below). However, before the drillbit hits the dirt, you must first lease land. An MDN reader and landowner who lives in Jefferson County sent us an update on leasing activity in the county–very exciting leasing activity. Not only is Ascent active, so too is Gulfport Energy…
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Uptick in Utica Drilling Predicted for Jefferson County, OH

Jefferson County, OH is not the first (or even second or third) county you think of when you think “Utica drilling.” But that may soon change. Jefferson shares borders with other counties that are heavily drilled–Carroll, Harrison and Belmont. There has been some drilling in Jefferson in the past, but with the slowdown over the past few years, not much has happened. But according to Ascent Resources and Chesapeake Energy, their respective companies are putting a renewed focus on the county in the coming months. Which is good news indeed. Couple that with a possible ethane cracker plant coming to Belmont County, and (according to the Chamber of Commerce), Jefferson is heading for “a brighter future” thanks to the Utica industry…Continue reading

6 Towns, 3 Schools in Jefferson Co., OH Split $5M/Yr in Pipe Tax

Click for larger version

With all of the negative talk about pipelines and opposition to pipelines and pipelines will kill ya and pipelines are from the devil, you may have overlooked the fact that some areas bow down and kiss the ground and thank their lucky stars to have a pipeline. One of those places is Jefferson County, OH. Six townships and three school districts in Jefferson County will be part of taxing districts to share in $5 million a year in public utility taxes paid by the Texas Eastern Transmission pipeline (TETCo), a major interstate pipeline system. This is newfound money that school districts and towns are starved for in this era of budget cuts. And the money doesn’t come out of taxpayers’ pockets. It comes from private industry–from a pipeline flowing clean-burning natural gas. In a situation not unlike Warren Beatty giving Faye Dunaway the wrong envelope, TETCo gave the wrong information to the Ohio Department of Taxation about which taxing districts the pipeline passes through. So some schools and towns that were initially elated and now deflated, and others have hit the lottery. Frankly, it’s too bad the pipeline doesn’t go through all of them!…Continue reading

AEP Gets Approval to Convert OH Coal Electric Plant to NatGas

The Cardinal Generating Station near Brilliant, Ohio

The Public Utility Commission of Ohio (PUCO) has approved a plan by American Electric Power (AEP) to convert an existing coal-burning electric generating plant in Brilliant (Jefferson County), OH into burning Utica Shale gas. The Cardinal Plant in Brilliant hosts three such coal-fired plants–but AEP only owns one of them. The other two plants, owned by Buckeye Power, will (for now) remain coal-fired. As part of the deal with PUCO, AEP also agreed to either retire or convert two more coal-fired plants in Conesville (Muskingum County), OH to burn natural gas. Strangely, the nubjobs at the Sierra Club are happy with the plan–because it kills off coal. Apparently the Sierra Club is conflicted internally as some of their leaders bash natgas any chance they get…
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Shift in Utica Drilling – from Wet Gas to Dry Gas

shiftOne of NGI’s (Natural Gas Intelligence) ace reporters, Jamison Cocklin, wrote a top notch news/analysis article last Friday in NGI’s Shale Daily publication about the “crucial priority” of new gathering pipelines and pipeline infrastructure in general that’s needed in the Utica Shale. Jamison made the observation that while not every operator in Ohio’s Utica Shale has shifted from focusing on wet gas extraction (concentrating on wells that extract not only methane but also natural gas liquids) to dry gas (or methane only), some of the biggies have. A change in focus doesn’t mean a change in geography. The change in focus from wet to dry is happening in core wet gas counties, including Monroe, Belmont and Jefferson…
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