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Pipelines Inc. Steps on the Shale Gas
EAST LIVERPOOL, Ohio -- Pipelines Inc., a company founded in 1991 to serve the water and sewer infrastructure market, happily finds itself in the right place at the right time.
The place is East Liverpool, and the time coincides with the acceleration of oil and gas exploration in northeastern Ohio and western Pennsylvania, which today has attracted some of the biggest names in the energy business to this part of the country.
“Mostly everything we do works around water and sewer projects,” says Pipeline’s Tag Lewis, who with his business partner, Mike Pusateri, owns the company. Pipelines Inc. stocks and distributes many of the products used in the construction phase of well pads and the large processing plants under development across Ohio.
Projects on the turnpike, bridge replacements, renovating major public infrastructures and commercial developments are the bread and butter of the operation, Lewis says. Plastic storm sewers, waterline fittings, valves, and other components used in water, storm and sanitary sewer infrastructure are distributed by the company and delivered to work sites across the region.
But the oil and gas industry has opened up an entirely new market and customer base for the company’s products.
“We’ve developed a very loyal customer base based on our ability to purchase product from inventory and deliver immediately,” Lewis says. “We kind of run an ambulance service for water and sewer line materials.”
As the oil and gas industry moved in three years ago, much of what the company had in stock were among the very materials in demand for new well pad construction, Lewis relates. “These jobs move extremely fast,” he says of the energy industry.
Indeed, within a matter of minutes, two emailed orders related to a major gas project in the southern tier of the Utica pinged on Lewis’ computer. “See what I mean?” he smiles.
Products such as standard drainage pipe, erosion-control materials, components used for fire suppression, and net matting to support aggregate on roadways and well pads are among those that Pipelines Inc. provides the industry, he says.
“We have a large delivery fleet,” Lewis says. “We have nine 24-foot flatbeds and about 15 pickup trucks that allow us to serve our customers rapidly.”
Moreover, the central yard of the company is positioned perfectly in East Liverpool, which straddles the Utica play in eastern Ohio and Marcellus shale play in western Pennsylvania and West Virginia.
Pipelines also has three other sites – a six-acre yard in Masury, which serves northeastern Ohio and northwestern Pennsylvania, a recently opened operation near Pittsburgh that covers a territory as far east as State College, Pa., and another yard in Marble Falls, Texas. The company employs 34 across all four locations.
“About half of our business is done in Pennsylvania,” Lewis notes.
The yard in Masury supplies materials throughout an area that stretches from Cleveland east to Erie, Pa., and as far south as Portage and Mahoning counties in Ohio, and Lawrence and Mercer counties in western Pennsylvania, says Joe Cappuzzello, an outside salesman at the Masury location.
“We stay busy. There’s a decent amount of work going on,” he says. “This time of year especially, there’s a push to finish up work before the weather hits.”
Many of the products Pipelines sells cross over into the oil and gas industry, Cappuzzello says. “They need things such as stabilization fabric,” he notes, and heavy-duty plastic mesh nets that support aggregate and prevent it from being pressed into the mud or earth, allowing vehicles or heavy machinery to roll across makeshift roads. “It’s used for the same purpose,” he explains, ”but now it’s a different customer at a different site.”
The company also supplies “filter sock” to well pads, Lewis adds. Well pads use this material – a serpentine sock filled with wood chips or compost – to prevent erosion. The products are perforated so that water flows through at a controlled rate while sediment is trapped.
“We’ve already had some experience working with oil refineries,” Lewis says. In addition to serving well pads with materials and products, the company is working extensively at some of the massive natural gas processing complexes under construction.
“We’re doing a lot of work in Harrison and Carroll counties,” he adds, referring to MarkWest Energy Partners’ cryogenic and fractionation complexes in development there. “We’re doing a fair amount of storm sewer work at the fractionation plants and MarkWest railroad sites. We’ve also picked up a lot of fire-suppression work.”
The company has experienced rapid growth since it was founded in 1991, Lewis says, and the oil and gas industry is just an added source of revenue on top of an already successful business.
“Our sales were $100,000 in our first year of business,” he says. The second year, sales climbed to $750,000. “This year, we’re looking at $20 million in gross sales.”
EDITOR'S NOTE: First published in the MidOctober edition of The Business Journal, published this week.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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