Tyler County, WV Mentioned as Candidate for $10B NGL Storage Hub

In May 2016, MDN brought you the news that a researcher at West Virginia University (WVU) believes a natural gas liquids (NGL) storage hub is what the Marcellus/Utica region really needs (see WVU Researcher Says Marcellus/Utica Needs an Ethane Storage Hub). According to Brian Anderson, director of WVU’s Energy Institute, without ethane storage (and pipelines) the Marcellus/Utica region risks seeing its abundant ethane leave the area, mostly heading to the Gulf Coast. We need that ethane here, in our area. Kevin DiGregorio, executive director of the Chemical Alliance Zone, also took up the cause in an editorial in July 2016 (see WV, OH, PA, KY Should Cooperate on $10B NGL Storage Hub). Since that time we’ve run a number of stories about the proposed $10 billion NGL storage hub for the Marcellus/Utica. In particular, West Virginia’s two U.S. senators, Shelley Moore Capito (Republican) and Joe Manchin (Democrat) have been pushing hard for such a hub (see WV Senators Ask Trump to Create NGL Storage Hub Commission). It has been thought that WV and PA and OH would need to cooperate to help fund such a project. Even the mighty Shell cracker is “only” costing $6 billion! So $10 billion is almost incomprehensible. But then everything changed last week when we told you we now have a pretty good idea of how the project will get funded–by the Chinese (see China Agrees to Invest Amazing $83.7 BILLION in WV Shale, Petchem). West Virginia has, from the beginning, been the state most often mentioned as the location for such a storage hub–but until now no specific site has come across our radar. That’s changed. With money flowing from China for a bevy of shale-related projects, different locations across the Mountain State are speaking up. Tyler County is the latest, saying they are under consideration for the $10B NGL storage hub, and they will do “whatever needs to be done” to win the project. There are, however, two other locations in WV also under consideration…
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WV DEP Orders Rover to Stop Pipe Construction in 2 of 4 Counties

Rover Pipeline has had trouble with the Ohio Environmental Protection Agency (OEPA). The OEPA has jumped on Rover’s back and hasn’t gotten off–over spills of drilling mud and mishandling (according to OEPA) torrential rainwater that ended up in Rover trenches, which Rover pumped out, flooding local farmers’ fields (see OEPA & Rover at Odds Over Storm Water Runoff, “Fine” Now $714K). The OEPA also claims diesel fuel was found in some of the spilled drilling mud (see OH EPA Says Diesel Fuel Found in Rover 2M Gal Drilling Mud Spill). OEPA got the Federal Energy Regulatory Commission (FERC) involved, asking FERC (the agency in charge of oversight) for help in reigning in Rover. FERC did just that, shutting down some of Rover’s activities while it (FERC) investigates. Now Rover is getting grief from the West Virginia Dept. of Environmental Protection (WVDEP). The WVDEP issued water pollution control permits for the project, and now says Rover has violated the conditions of the permits and must cease and desist “land development activity until such time when compliance with the terms and conditions of its permit and all pertinent laws and rules is achieved.” The issue appears to revolve around handling of storm water runoff (one of the issues in Ohio). Construction of Rover in Doddridge and Tyler counties has stopped, but construction continues in Hancock and Marshall counties…
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FERC Responds to Rover Request to Begin Drilling in 2 Locations: NO

It was full speed ahead for Energy Transfer’s Rover Pipeline construction project in Ohio–until a series of drilling mud spills hit, including one that dumped some 2 million gallons of bentonite mud into a wetland near the Tuscarawas River in Stark County, OH (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). Not long after the Federal Energy Regulatory Commission (FERC) slapped Rover with a “stop horizontal drilling” order (see FERC Slaps Rover Pipeline with Stop Drilling Order). Let’s put that into context. Most of the pipeline getting laid for Rover is in trenches–not from underground horizontal drilling. There are some places along the route when you can’t dig a trench–like crossing a creek or river, or major highway. In those cases, you drill horizontally underground, underneath the object. When drilling, bentonite mud is used to keep the drill bit cool. Sometimes the mud pumped underground finds its way back out again via cracks in the rock. It is those accidents that FERC (and the Ohio EPA) find a little too frequent and voluminous for their liking. So FERC told ET to stop any new underground drilling. Less than a week after FERC ordered ET to stop drilling, ET filed a request with FERC to begin drilling in two locations key to finishing the first leg of the pipeline–locations where the equipment is already in place, and the erosion controls already set up: Captina Creek in Belmont County, OH, where Rover wants to complete the Clarington lateral, and Middle Island Creek in Tyler County, WV, where Rover wants to complete the Sherwood lateral (see Rover Gets Serious About Mud Spills, Asks FERC for OK to Drill). FERC responded to ET’s request to drill in those locations last Thursday: NO…
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Rover Gets Serious About Mud Spills, Asks FERC for OK to Drill

While reviewing documents filed with the Federal Energy Regulatory Commission (FERC) for the Energy Transfer Rover pipeline project, we came across a letter filed by ET yesterday. The letter (full copy below) addresses the recent “inadvertent return” (i.e. major leak) of 2 million gallons of drilling mud in a swamp next to the Tuscarawas River (Stark County, OH). Following that leak and other leaks, FERC told Rover to stop any new underground drilling not already under way (see FERC Slaps Rover Pipeline with Stop Drilling Order). In yesterday’s letter, Rover says they have hired a new firm, GeoEngineers, to review all of the plans and data around drilling horizontally underground (horizontal directional drilling, or HDD) in locations where you can’t dig a trench. Rover is also posting GeoEngineers personnel at each HDD location, to help supervise HDD activities. But wait, there’s more! Rover is hiring extra watchers at each HDD location to watch for the first signs of, the first bubble, that indicate drilling mud isn’t staying underground where it belongs. Given all of what Rover is doing (there is more, read it in the letter), Rover then goes on to ask FERC, can Rover please please please drill in two spots where all of the equipment is ready to go? Those spots are Captina Creek in Belmont County, OH, where Rover wants to complete the Clarington lateral, and Middle Island Creek in Tyler County, WV, where Rover wants to complete the Sherwood lateral. Rover argues it will do more harm to the environment to pull down erosion control devices and move equipment out and back in, than if they just went ahead and did the work now. Will FERC agree?…
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Antero Forms JV with MarkWest to Service Combined 360K WV Acres

Marathon Petroleum subsidiary MarkWest Energy and Antero Resources’ midstream subsidiary Antero Midstream have announced a 50/50 joint venture focused on gathering and processing natural gas and natural gas liquids in northern West Virginia (Tyler, Wetzel and Richie counties). Antero Midstream will contribute its gathering operations for 195,000 acres in WV, boosting MarkWest’s total WV Marcellus gathering operation to a huge 360,000 acres. In addition, the JV will add three new processing plants to MarkWest’s Sherwood Complex in Doddridge County, WV. And get this: the JV contemplates building another eight (!) processing plants at Sherwood and a new/second location. Antero expects to invest “up to $800 million” through 2020, and has already made an initial $155 million investment. We think it’s no coincidence that on the same day Antero Midstream announced the deal (yesterday), they also announced a new round of units (i.e. shares of stock) they hope to pedal to raise $198 million. Here’s the details on the JV deal between Antero and MarkWest…
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Marcellus Worker Killed in Tyler County, WV at Antero Well Pad

We have sad news to report. A young man, just 19 years old, was killed when he was “struck by a truck, then pinned between the truck and a stationary object” at an Antero Resources well pad site in Tyler County, WV last Thursday. Hunter Osborn, of Lewis County, WV, worked for U.S. Well Services, the fracking company hired by Antero. The well pad is called the Hartley East Pad in Middlebourne. Mr. Osborn was pinned between a tractor trailer backing up to unload sand and a sand silo. Our thoughts and prayers go out to the family and friends of this young man. Below are the details we could find about the accident…
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Statoil Sells Another 11.5K WV Marcellus Acres to Antero for $96M

StatoilNorwegian oil giant Statoil, which is 67% owned by the country of Norway, was an early and big mover in leasing Marcellus and Utica Shale acreage, amassing a huge 665,000 acres. Over the past few years Statoil has been equally aggressive in divesting itself of its non-operated acreage (Statoil doesn’t do the drilling) in the northeast–in particular in West Virginia. This is about to get complicated, but we’ll try to make it understandable. A lot of Statoil’s acreage is in joint venture deals. In December 2014, Statoil sold some of its “working interest” in the Marcellus acreage it owns in WV and PA to Southwestern Energy for $394 million (see Statoil Reduces Marcellus Holdings in $394M Deal with Southwestern). The deal reduced Statoil’s ownership in its WV acreage from 32.5% down to 23%. In June of this year, Antero Resources purchased some of that WV acreage from Southwestern (see Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres). Antero snapped up even more in the same geography in July (see Antero Resources Picks Up Another 13K Marcellus Acres for $108M). Yesterday Statoil announced it is selling more (the rest of?) its ownership in non-operated WV Marcellus acreage to Antero–some 11,500 net acres–for $96 million in cash. That is, Antero continues to consolidate and take full ownership over Marcellus acreage in WV–primarily in Wetzel, Tyler and Doddridge counties…
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Statoil Completes Sale of WV Marcellus Assets to EQT

StatoilIn May MDN told you that EQT, a major Marcellus (and Utica) driller based in Pittsburgh, had cut a deal to purchase all of Norwegian Statoil’s Marcellus assets in West Virginia (see EQT Buying 62.5K “Core” WV Marcellus Acres from Statoil for $407M). The deal gives EQT another 62,500 net acres and 50 million cubic feet per day (50 Mcf/d) of natgas production for $407 million. The acreage is located in Wetzel, Tyler and Harrison counties in WV. The deal includes 31 Marcellus wells and ~500 drilling locations. It bumps up EQT’s available drilling locations by a big 29% and shows the company’s continued commitment to the mighty Marcellus Shale. Statoil reports the deal closed last Friday…
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Antero Will Use Its Own Midstream Co on Newly Acquired WV Acreage

antero resourcesOn Friday MDN reported that Antero Resources has just cut a deal with Southwestern Energy to purchase 55,000 net acres located in Wetzel, Tyler and Doddridge Counties in West Virginia for $450 million (see Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres). As we observed (which no one else reported), Antero paid far less for the acreage than Southwestern did in 2014 when they purchased it from Chesapeake Energy. We spotted an interesting tidbit from SNL Financial: One of the attractions for Antero is that they will use their own midstream company to pipe the gas they produce from the newly purchased property. There are no preexisting contracts in place with another midstream company. So Antero will make money in two ways: by producing the gas, and by transporting it. Smart. Another interesting tidbit: While Antero says the acreage is in its “core” area, a Barclays analyst calls it “second best” acreage for Southwestern…
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Antero Takes Southwestern to Cleaners in Deal for 55K Marc. Acres

take to the cleanersAntero Resources announced yesterday that the company has just cut a deal with Southwestern Energy to purchase 55,000 net acres located in Wetzel, Tyler and Doddridge Counties in West Virginia for $450 million. Antero says the acreage is in the “core” of the Marcellus and some 75% of the acreage also includes Utica Shale rights. The acreage Southwestern is selling is acreage they themselves bought in 2014 from Chesapeake Energy. Chessy originally signed the acreage with landowners for $5 per acre (peanuts). Southwestern paid Chesapeake $12,000 per acre (see Southwestern Paid Chesapeake $12K/Acre for Land Signed @ $5/Acre). Antero picked up the acreage for $8181 per acre–about $4K/acre (one-third) less than what Southwestern paid for it. Oops. No wonder Antero is crowing about the deal! Here’s the lowdown, with announcements from both Antero and Southwestern…
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EQT Buying 62.5K “Core” WV Marcellus Acres from Statoil for $407M

EQT logoEQT, a major Marcellus (and Utica) driller based in Pittsburgh, announced yesterday it has cut a deal to purchase all of Norwegian Statoil’s Marcellus assets in West Virginia. The deal will give EQT another 62,500 net acres and 50 million cubic feet per day (50 Mcf/d) of natgas production for $407 million. The acreage is located in Wetzel, Tyler and Harrison counties in WV. The deal includes 31 Marcellus wells and ~500 drilling locations. It bumps up EQT’s available drilling locations by a big 29% and shows the company’s continued commitment to the mighty Marcellus Shale. How will they finance it? EQT released another announcement yesterday that says they are floating 10.5 million shares of new stock, hoping to get $67 per share for a total of $700 million for this deal and for “other potential acquisitions and for general corporate purposes.” Statoil is retaining ownership of its shale assets in Ohio and (for now) it’s non-operated Marcellus assets–i.e. joint venture deals where Statoil owns a portion of the lease but doesn’t do the drilling…
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WV DEP Fines Antero Resources $93K for “Pollution” of Streams

The West Virginia Dept. of Environmental Protection has gotten a signed consent order from Antero Resources assessing a fine of $93,000 on the company for “pollution” of waterways in several WV counties related to installing pipelines. So says a single Associated Press article. We can find nothing about this story from another other news source than the AP. Not on the WV DEP website. Not on Antero’s website. We scoured the web. We scoured our own MDN archives. Nada. Just a single AP story currently running in dozens of newspapers and in other media outlets/websites across the country. Here is the entire, very brief AP story with sparse details…
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Family of Man Who Died in 2013 Eurkea Hunter Accident Gets $18M

lawsuitIn April 2013 MDN reported on the tragic death of 56-year-old Bruce Phipps from Marietta, OH who was working at a Eureka Hunter “pig” (Pipeline Inspection Gauge) receiving station near near Wick (Tyler County), WV (see Flash Fire at Pipeline Station in WV Kills 1, Injures 3 Others). Later, Pennsylvania resident Raymond Miller, another of the injured workers, also died (see Second Death from Flash Fire at WV Pipeline Station). Phipps’ widow sued Eureka Hunter and several other companies involved with the pipeline and last week all parties settled and the Circuit Court of Ohio gave its stamp of approval. Phipps’ widow and her family will receive $18 million, minus one-third ($6 million) that goes to the lawyers…
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WV Northern Panhandle Production Rockets 3X from 2012 to 2014

Natural gas production in the northern panhandle area of West Virginia is rapidly expanding–nearly 3 times in 2014 what it was in 2012, according to West Virginia Geological and Economic Survey statistics. In Ohio, Marshall, Wetzel, Brooke, Tyler and Hancock counties natural gas production was 123.8 billion cubic feet in 2012. In 2014, that number ballooned to 346.7 Bcf. What about 2015 and beyond? And, who’s doing all that drilling?…
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Pipeline Ruptures & Burns at Jay-Bee Well Pad in Tyler County, WV

Tyler County, WVThere was a rupture of a gas pipeline at a Jay-Bee Oil and Gas drill pad in the Big Run area of Tyler County, WV early Friday morning. There was no explosion, and no one was injured–but there was a fire and the fire could be seen for miles in the dark early morning. The fire from the ruptured pipe (cause still being investigated) burned for an hour before it was extinguished. The wells on the pad are currently shut-in while the WV Dept. of Environmental Protection investigates. This is not the first Jay-Bee accident in the Big Run area…
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Contractor Fined $13,550 for WV Well Pad Violations/Death in 2014

We don’t normally miss news like an accident at a well pad in the Marcellus that kills someone–but we did this time. At the end of November 2014, Ryan Dunn, a contract worker employed by Precision Drilling, was working at an Antero Resources well pad in Tyler County, WV when he was struck and run over by a front-end loader used to move pipe at the site. Dunn was pronounced dead at the scene. A true tragedy. The federal Occupational Health and Safety Administration (OSHA) investigated and found a number of problems at the site. OSHA has completed their investigation and is assessing a total of $13,550 in penalties against Precision Drilling. We’ve not spotted anything about lawsuits or about fines by the WV Dept. of Environmental Protection. Here’s what we’re able to locate on the accident and resulting fine by OSHA…
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