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Updates on 3 Major OH Pipelines at Utica Midstream Seminar
Some 160 people showed up for the Utica Midstream Seminar held yesterday at the National Football Hall of Fame in Canton, OH. The event, sponsored by the Canton Regional Chamber of Commerce and ShaleDirectories.com, provided updates on three major pipeline projects either under construction or soon to be under construction in the Buckeye State: Marathon Petroleum’s Cornerstone Pipeline, Spectra Energy’s NEXUS pipeline project, and Energy Transfer’s Rover pipeline project. Here’s what reps from each organization had to say about their respective projects…
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We often debate whether or not a bit of news is actually interesting for the MDN audience. Will this bit of news help either a landowner, driller, midstreamer, supply chain company or investor if they knew about it? The following story comes down right on the line for us. We could go either way, but we elected to include it. We don’t know when, exactly, but at least two years ago SemGroup Corporation, a publicly traded (shares of stock) midstream company that moves mostly oil from the wellhead to market, started up a master limited partnership (MLP) subsidiary called Rose Rock Midstream. An MLP issues “units” instead of shares of stock. MLPs have certain tax advantages for investors. We ran a story in June 2014 about Rose Rock buying some of Chesapeake Energy’s assets, including a trucking operation that services the Utica Shale in Ohio (see 
We love it when we spot a company adopting a contrarian strategy. Received wisdom and prevailing thought says that the oil and gas industry–especially in the Marcellus/Utica–is contracting. Drillers aren’t drilling, and that affects the supply chain (those companies supplying goods and services to the industry) in a big and negative way. Yep–true enough. But the received wisdom also says companies should diversity–look for business outside of the oil and gas industry. What’s contrary is to take advantage of this downturn to expand capacity–to get ready for when the downturn turns again into an upturn. That’s just what Watco Transportation Services is doing with their Kanawha River Railroad short line subsidiary. Kanawha River Railroad has just cut a deal to lease 309 miles of rail lines from Norfolk Southern in Ohio and West Virginia. One of the customers on these short haul lines will be, yep, Marcellus and Utica drillers and sand suppliers and chemical suppliers and equipment suppliers. Nope, there’s not all that much shipping right now, which makes this a step of faith. But the company believes that the future will be here soon and things will turn and the Kanawha River Railroad will be ready to take full advantage of it. We love a railroad story, and we love a contrarian story. This is both…
Fairmount Santrol is a proppant manufacturer/supplier headquartered in Ohio. Proppants are things like sand and ceramic beads used to “prop open” tiny fractures created in hydraulic fracturing of shale oil and gas wells. In other words, Fairmount Santrol is a regional sand supplier for shale drillers–and a good proxy to understand what’s happening (or not happening) in our neck of the woods when it comes to drilling. If drillers aren’t drilling as much, that will show up first in the balance sheets of companies like Fairmount. And so it does. Fairmount reports in their first quarter 2016 update that revenues in 1Q16 were down 52% from 1Q15. But you can’t automatically assume that means there was half the drilling one year later. Fairmount also reports the volume of sand sold was down just 8% from 1Q15 to 1Q16. Why the discrepancy between revenue and volume? Fairmount doesn’t say, but we think we know: drillers have been putting the squeeze on supply chain companies like Fairmount, forcing them to deeply discount their prices…
Yesterday we reported that a group of Ohio landowners calling themselves LEASE (Landowners for Energy Access and Safe Exploration) are encouraging Ohio residents to write in support of drilling in the Wayne National Forest (see 
It was four years ago last month that BP entered the Utica Shale in a big way by signing a lease with members of the Associated Landowners of the Ohio Valley (ALOV) group to lease 84,000 acres in Trumbull County, OH (see 
In MDN’s daily trawl of the news, we came across a resource for landowners from Ohio State University (OSU), a program called “Pipeline Easement and Right-of-Way Agreements.” Apparently OSU’s Extension service conducts workshops on occasion for landowners and other interested parties. We don’t have a list of the workshops, but we do have copies of the resources they hand out–very useful resources, including four different fact sheets that we think landowners in any state will benefit from…