Tuesday, March 12, 2013YOUNGSTOWN, Ohio – The first product from Exterran Energy Solution Inc.'s new 60,000-square-foot plant on Salt Springs Road is scheduled to roll out April 1, a company executive said Monday.
"We're excited," Michael Grimland, director of manufacturing at Houston-based Exterran, told some 200 business leaders attending the Ohio Shale Development: Economic Opportunities Forum at Mr. Anthony's. "We've got a plan this year that we think will take us somewhere around $15 million in annual revenues" at the new plant, Grimland added.
Once the plant is operating at full capacity, annual revenues could grow to between $40 million and $60 million, depending on the type of equipment that the market demands, he continued.
"Right now, we're in our pre-production trials," Grimland reported. "We think that's going to take us about a month, and on April 1 we'll start on our first production. We hope to have all our production and flow lines running by that time."
Exterran announced in 2010 it would construct a new manufacturing plant in Youngstown to accommodate growth related to oil and gas exploration in eastern Ohio's Utica shale and the Marcellus shale in Pennsylvania. The company manufacturers equipment for the oil and gas industry such as compressor stations.
Thus far, the company has hired 61 people to staff the new operations, Grimland said. He expects that number to increase to 80 within the next six weeks as production gets under way.
"We designed and built this facility to be able to handle all of our different products," he said. As drilling and permitting activity increases along the Utica shale, Exterran's equipment is installed at well sites and compressor sites throughout the region.
One of the reasons the company selected the Youngstown site was the availability of a skilled workforce, Grimland said. "The workforce is really energized," he observed. The new hires all possess strong technical skills such as welding, fitting and design work, while all of them express a strong support for the oil and gas industry.
Grimland was among a host of speakers at Monday's event, which was co-sponsored by the Youngstown/Warren Regional Chamber, The Ohio Energy Resource Alliance, the Ohio Shale Coalition and the Ohio Chamber of Commerce.
The emerging shale industry has already had a profound impact on eastern Ohio, said Shawn Bennett of Energy In Depth. Aside from high-profile projects such as Exterran and V&M Star's new plant in Youngstown, communities all along the Ohio River watershed are feeling the benefits of the industry.
Last year, the industry accounted for more than 38,000 new jobs in the state, Bennett said, emphasizing that the Utica is still in its very early stages of exploration and development. In Carroll County for example, the unemployment rate has dropped 3% since last year while its sales tax revenues have grown by 25%.
Carroll County represents the heart of shale exploration in the state, Bennett noted. Thus far, the county has attracted 203 horizontal drilling permits, mostly from energy giant Chesapeake Energy Corp. Nearby Harrison and Columbiana counties each have 64 permits filed, he added.
Much of the drilling activity is concentrated in the southern portion of the Utica, Bennett said, as companies such as Gulfport Energy have discovered highly productive wells in areas of Harrison and Belmont counties.
In the northern section of the Utica play, Bennett reported that BP spudded its first well in Trumbull County on Thursday, and has plans to drill at least four wells this year in the county. "Once that well comes online, it will be very exciting to see what that looks like."
Other drillers active in the north include Halcon Resources, Hilcorp Energy Corp. and Consol Energy. Consol has drilled three wells in Mahoning County.
"It's very exciting to see this progress," Bennett said, adding the next step is midstream development.
Among the largest processing systems under construction is MarkWest's $500 million processing plant in Cadiz; M3 Midstream's $900 million system in Columbiana County and Harrison County; and a $300 million processor and pipeline system under development in Mahoning County by Pennant Midstream – a partnership between Hilcorp and NiSource.
Another project, Blue Racer Midstream, is looking to build a natural gas processing complex near Petersburg in Mahoning County.
U.S. Reps. Tim Ryan, D-13, and Bill Johnson, R-6, addressed the event and expressed their support for the industry and the opportunities it presents for the Mahoning Valley.
"It's an opportunity for the United States," Ryan said. Not only is the industry sparking new job growth throughout Ohio, it's promoting the prospects of the country becoming a major exporter of oil and gas to the world. "That's the process that we're in now -- to make sure that this can revolutionize not just our area, but the United States of America."
Johnson said energy represents the "next frontier" for the American economy, and shale gas exploration is integral to the country becoming energy independent.
Innovation spawned by the space age during the 1960s has led to new technologies in the oil and gas industry today, Johnson said. This technology, coupled with the vast amount of natural gas resources trapped in the Utica shale, presents unlimited opportunity for the region.
"We're going to take this to unbelievable levels," Johnson said. "We're sitting on what's going to lead America back."
The Republican congressman emphasized he would continue to resist any new federal regulations related to the use of hydraulic fracturing.
"We've been fracking for 60 years," Johnson said. "There's been a million-plus operations and there's not one proven instance where there's been contamination of the water supply."
Copyright 2013 The Business Journal, Youngstown, Ohio.
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