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Bluegrass, Hilcorp Update Landowners on Projects
COLUMBIANA, Ohio -- Bluegrass Pipeline LLC's new project slated for early 2015 could bring between 200 and 300 new construction jobs -- and possibly another processing plant -- to the region, officials say.
"We have completed our survey permission process, and right now over the last 12 days, we've been on the ground acquiring rights to easements," said Jim Curry, land right-of-way project manager for Bluegrass.
Curry was among the featured speakers at an informational meeting last night hosted by the Columbiana Area Chamber of Commerce at the Crestview Performing Arts Center. About 100 members of the community attended the event.
Bluegrass, a partnership between Williams and Boardwalk Pipeline Partners LP, is in the process of mapping out a path for 600 miles of new pipeline that stretches from Mercer County, Pa., through Mahoning and Columbiana counties, and south into Kentucky. The line would then link with an existing pipeline that runs to Louisiana.
The pipeline would be used to transport natural gas liquids extracted from gas wells in the Marcellus and Utica shale plays in western Pennsylvania and eastern Ohio down to the Gulf of Mexico.
That project could also include the addition of a new processing plant somewhere near the pipeline's route.
"Bluegrass is talking about building another processing plant as the need arises in the community, so that would be an additional amount of work for us," reported Rocky DiGennaro, business manager for Laborers Local 125 in Youngstown. "Probably about one-third of our membership is currently doing some pipeline-related work, whether it’s the cryogenic plant in Springfield Township or the actual pipeline work."
About 25 miles of the pipeline is slated to move through Columbiana County, while 1.6 miles of the line is expected to pass through Mahoning County, Curry said. Some 10% of the land leases in Columbiana County are already signed, he noted. The Columbiana County leg includes 160 tracts of land that need pieced together.
Lease agreements along the pipeline's Mahoning Valley route could command as much as $8 million for these landowners, Curry said. "In the state of Ohio, it's in excess of $100 million for landowners in their pockets."
Land leases should be locked up by December, and pre-construction work could begin in 2014, Curry reported. Actual construction of the pipeline wouldn't start until the first quarter of 2015, and would finish by the end of that year.
"Welders, truck drivers, road building. There's a lot of work to be done," Curry said. "We want to bring in local people to do that work."
Other oil and gas companies see value in this part of the Utica,
Hilcorp Energy Co. holds about 43,000 acres of leaseholds in Ohio, the majority of which is in Columbiana County, said Hilcorp representative David Wilkins.
"We are starting to ramp up," he told the audience. The company has leases in Mahoning and Columbiana counties, as well as lease agreements with landowners in Lawrence and Mercer counties in western Pennsylvania.
Hilcorp has two rigs operating, one at the Carbon Limestone Landfill in Poland Township, and the other in Lawrence County. Hilcorp has drilled 11 wells, eight of which – two in Ohio and six in Pennsylvania -- are producing.
"So far, we are very pleased with what we've seen," Wilkins said.
Wilkins emphasized the company's 50% stake in the Hickory Bend project, a partnership between the company and NiSource Midstream that is constructing the large processing plant in Springfield Township, along with 50 miles of pipeline beginning in Mercer County and into Columbiana County.
He stressed that Hilcorp is held to the most stringent environmental and safety standards when drilling, completing or operating a well. "We're going to be here for the long haul," Wilkins said, adding his company employs some of the most sophisticated high-tech monitoring systems at its well sites.
And Hilcorp is doing all it can to use local vendors and workers on these construction projects, he added. "We're not going to bring up folks from the South," he remarked. "We've had to on occasions, when there were skilled positions, but I've said that we are to be looking for local jobs."
Local vendors are benefiting from Hilcorp's presence, Wilkins continued. As an example, he cited the company has purchased about $150 million worth of tubular products from Vallourec Star's Youngstown mill since 2002. "We view it as buying premier Ohio product for our oil and gas operation," he said. "We want to be good stewards. These wells will be producing 20 years from now."
Others attending the event say they aren't so sure about the oil and gas industry in the community.
Dan Dattilio of Leetonia said that he wanted to learn more about the Bluegrass Pipeline's path and whether it would affect his property. "I'm trying to find out where the pipeline's going. I'm not sure if it's going to come through our land," he said. "We’re concerned about it coming through where we live, we're concerned about water pollution."
Margaret Henry, a resident of North Beaver Township in Lawrence County, said she attended the event because of questions she has about Hilcorp's operations in western Pennsylvania.
"This is just a flagrant dog and pony show for the industry," she said of the event. "They never even bother to mention the pollutants that this wonderful cryogenic plant and pipelines are putting into the atmosphere."
Henry asserted that Hilcorp has abandoned some well sites in Pennsylvania, and she's concerned about the integrity of these wells and nearby pipelines. "Everywhere around here, they're putting people's lives in danger,” she said.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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