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Kensington Gas Processing Plant Begins Operations
KENSINGTON, Ohio -- What oil and gas producers have longed for in the Utica shale is now starting to come on line -- and sales have begun of natural gas processed at the huge new cryogenic plant here.
The initial phase of Utica East Ohio Midstream LLC's cryogenic plant is now in operation, allowing for the first time natural gas from nearby wells in this part of eastern Ohio to be processed and marketed, officials reported late Monday.
"Completing this first stage of the project is an important milestone in advancing the development of the Utica shale formation in Ohio, as wells can begin producing both natural gas and natural gas liquids," Frank Tsuru, president and CEO of M3 Midstream, said in a statement.
M3, Access Midstream and EV Energy Partners partnered to form UEO Midstream, which is developing a $900 million, multi-phased infrastructure network that consists of the Kenginston cryogenic plant in Columbiana County and a day natural gas liquids fractionation, storage and rail facility near Scio in Harrison County.
Producers across the Utica have said that the biggest hindrance to well production is the lack of pipeline and processing infrastructure. MarkWest Energy Partners is also developing a large cryogenic/fractionation network in Harrison County, and that operation is partially underway.
"We are pleased to commission the first fully integrated natural gas processing and fractionation project in Ohio, and proud that these facilities have been built safely and in compliance with Ohio's environmental regulations," Tsuru said.
Tsuru reported that gas sales from the plant began July 28. Houston-based M3 serves as the facility manager of the plant facilities and is responsible for their construction and operation. Oklahoma City-based Access Midstream is responsible for the construction and operation of all pipeline facilities upstream of the UEO plants
The first phase of the project consists of 63 miles of gathering lines capable of transporting natural gas and natural gas liquids, UEO said in a press release.
The first train of the Kensington plant is able to process 200 million cubic feet of natural gas per day, and a second and third phase are planned at the site. The plant separates "dry" gas such as methane from "wet" gas by chilling the gas to about 150 degrees below zero.
Wet gas is then transported to the Scio plant, where it's processed into saleable products such as ethane, butane or propane. The dry gas, or methane, is sold into existing natural gas lines.
Once the second and third phases of the project are finished, the UEO system will be able to process 800 million cubic feet of gas per day through cryogenic processing, 135,000 barrels of oil per day through natural gas liquids fractionation, 870,000 barrels of natural gas liquids storage, and a rail facility capable of loading 90 cars a day.
Construction of the second phase of the project is expected to be completed by December.
Access Midstream CEO Mike Stice said that cooperation on the project allowed it to be finished on time and on budget.
"Access provided the gathering and compression while M3 delivered on the processing and fractionation. Together, phase one of this multi-phase development resulted in 200 Mmcfd of capacity being placed in operation both on time and on budget," Stice said in a statement.
Mark Houser, president of and CEO of EV Energy Partners, said that the new processing network is sure to help production in the Utica shale.
"We are thrilled to be a part of the midstream infrastructure development of the Utica shale play," he said. "The commencement of operations for the UEO project will be a huge boost for Utica shale producers that have been significantly constrained by the lack of sufficient midstream infrastructure in the area."
More than 1,700 people thus far have been employed to construct the UEO network, and more than 60% of them are Ohioans. About 50 full-time employees would be needed to staff both facilities, with 15 additional employees needed to operate the rail terminal at the Scio plant, according to the announcement.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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