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Judge Lifts Restraining Order on Pipeline Project
YOUNGSTOWN, Ohio – A federal judge in Akron has dissolved a temporary restraining order that stopped a Carroll County pipeline project in its tracks two weeks ago.
The ruling, issued late Friday by U.S. District Judge John Adams, allows CBC Services Inc. to proceed with connecting some 1,000 feet of pipe to a well on land owned by Joseph Coniglio.
"I think we had some strong points, but the judge didn't agree," Coniglio said. "He agreed to let Chesapeake intervene and lifted the restraining order."
Coniglio reports that workers were at the well site Saturday morning welding the sections of pipe together. "On Sunday, they had a school bus filled with workers here," he said.
The Coniglios sued CBC in Carroll County Common Pleas Court July 9 and were granted a temporary restraining order that halted the pipeline project. The case was then moved to U.S. district court where, on July 20, Judge Adams listened to arguments during a daylong hearing and allowed Chesapeake to intervene in the case.
At issue is whether Chesapeake has the rights to connect the pipeline to the well absent a separate pipeline agreement. The Coniglios did sign a surface use agreement that allowed the well to be constructed. Coniglio contended that it contained no provisions about building a pipeline across his property without his permission.
The court ruled for Chesapeake and CBC Services and ordered the injunction lifted. The judge said he would issue a formal written opinion explaining his ruling at a later date.
"Right now, I don't know where we're at," Coniglio said.
In 2010, the Coniglios signed an initial lease with Anschutz Energy that said a pipeline could not be constructed without the landowner’s consent.
CBC is contracted to construct the line through Chesapeake Exploration LLC and CHK Utica, subsidiaries of Chesapeake Energy Corp., the second-largest natural gas producer in the United States.
Coniglio, his wife, Christine, and his brother Frank, own more than 570 acres that straddle Carroll and Columbiana Counties near the small crossroads of Kensington, an area shaping up to be among the most lucrative spots for oil and gas exploration.
Chesapeake drilled a well on the Coniglio farm in the fall of 2011 under the terms of the surface use agreement and now wants to connect the well via a pipeline so it can pump natural gas into other gathering lines.
Chesapeake's former subsidiary, Chesapeake Midstream LLC (recently sold to Global Infrastructure) and two other partners, M3 Midstream and EV Energy Partners, are constructing a $900 million pipeline network in eastern Ohio to gather and process natural gas drilled from the Utica shale.
The project includes the construction of a large processor in Kensington, on the southern edge of Columbiana County and not far from the Coniglio farm.
Without a connecting pipeline, the Coniglio well cannot produce, thereby risking millions of dollars of investment by Chesapeake.
Coniglio told The Business Journal July 12 that he and his family were unwilling to let Chesapeake proceed with the project without a separate agreement. In some cases, landowners have negotiated separate easement leases for pipelines that have commanded as much as $15 per foot.
"We're not trying to stop the pipeline or progress," Coniglio said. "If Chesapeake wants to make us an offer, let's see it."
BACKGROUND: Utica Pipeline Project Halted by Legal Dispute
Copyright 2012 The Business Journal, Youngstown, Ohio.
Copyright 2012 The Business Journal, Youngstown, Ohio.