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Chorus of ‘Thank Yous’ for Pennant Midstream Plant
NEW MIDDLETOWN, Ohio -- It was indeed a “chorus of thank yous” this morning, just as the CEO of NiSource Midstream Services, Robert C. Skaggs Jr., predicted as he opened the dedication ceremonies for the Pennant Midstream Hickory Bend gas processing plant here.
From NiSource’s partner in Pennant Midstream LLC – Hilcorp Energy affiliate Harvest Pipeline – to the pipeline companies and building trades unions who built the gathering lines and processing plant, and the public officials who helped cut the bureaucratic red tape, Skaggs was effusive in his praise.
To Gov. John R. Kasich, he said, “You’re the real deal, one of the most vocal and [ardent] believers in this region.”
Skaggs recalled a phone call he received from the governor three years ago. He quoted Kasich as telling him, “ ‘Skaggs, get off your backside. We have to make something happen in the Utica.’ ”
That “something” today is the $375 million Pennant Midstream Hickory Bend gathering lines and processing project. The cryogenic plant is the first of three that could be built at the 90-acre site. “Over the next five years, we’re going to be investing literally billions and billions of dollars into Ohio,” Skaggs said. “In the not-too-distant future, this will be the fountain of energy for the United States.”
Chad Zamarin, chief operating officer of NiSource Midstream Services and president of Pennant Midstream, called the gas processing complex “the promise of what’s possible.”
While the first phase of the project, which was dedicated today, amounts to a $375 million investment, he noted. “We believe the ongoing development of this project could total over $1 billion in the next several years.”
Zamarin said the cryogenic plant employs “the most advanced safety systems and the cleanest technology available in order to protect the environment and the community.”
Hilcorp “shares our commitment to safety, to the environment and to the people of Ohio,” he said. “We recognize the responsibility we have to build and operate in a responsible manner.”
Houston-based Hilcorp is developing wells in the northern tier of the Utica, especially in Poland Township. The company's drilling operation at Republic Service's Carbon Limestone Landfill site has secured 12 permits for wells there, according to records from the Ohio Department of Natural Resources.
On Sept. 30, NiSource and Hilcorp jointly announced that its Pennant Midstream joint venture has begun work on a $60 million pipeline that will have the capacity to delivery 90,000 barrels of natural gas liquids to the UEO Kensington plant in Columbiana County, a joint venture between M3 Midstream, Access Midstream and EV Energy Partners.
To build the plant here, some 200 union tradesmen put in a combined 140,000 man-hours at the site, Carlton Ingram of Local 66 of the Operating Engineers, said at today’s dedication. With the emergence of the oil and gas industry, all of the building trades unions are expanding their training programs “to meet the local needs here for jobs.”
Ingram thanked the project’s general contractor, Chapman Corp., Associated Pipeline Co. and Beaver Excavating Co. for employing union members.
Springfield Township Trustee Bob Orr also offered his thanks to all the companies, their executives and on-site managers. “The people we’ve been able to work with from Houston have all been wise and cooperative,” he said.
Orr introduced Kasich who lauded Skaggs for building the plant in Ohio and not in Pennsylvania, and for NiSource’s “commitment to hire Ohioans.”
“We don’t like to see license plants from Louisiana, Texas and Oklahoma” unless they are visiting Ohio to watch a football game, the governor joked.
Kasich acknowledged the rollout of the oil and gas industry is “a little slower than we thought, or that some had projected.” But, he explained, the rock formations in Ohio present unique technological challenges.
“The challenge in the oil window is that it’s hard to make the oil flow,” Kasich said. “Some people think it’s a problem … I think it’s a plus because I want this industry to be here for another 40 to 50 years. I don’t want them to come here, take what we have and high-tail it out of here.”
Kasich reminded the audience that he grew up in nearby McKees Rocks, Pa., a former steel town that like the Mahoning Valley has learned the necessity of economic diversity.
“What most people focus on is let’s get [the gas] out of the ground. What we’re thinking about now is what are the adjacent industries, the adjacent technology that can fit right in so we can diversify the Valley,” he said.
Kasich concluded his remarks by going way off message, “at the risk of putting this story off the front page,” he said.
The governor proceeded to offer the state’s help to “design a program that will fix” the Youngstown City Schools. “You bring us your plan, your program. You put your children first, and we will help you,” he said.
Kasich is scheduled to make remarks at 1:30 today in Scio, Harrison County, where he will celebrate the opening of UEO Buckeye's Harrison Hub natural gas processing and fractionation complex there.
That plant, like the processing plant in Kensington, is a joint venture between M3/Momentum Midstream, EV Energy Partners, and Access Midstream.
Copyright 2013 by The Business Journal, Youngstown, Ohio.
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