Friday, August 22, 2014YOUNGSTOWN, Ohio -- Blue Racer Midstream LLC’s plans to construct a multi-million-dollar processing plant in southeastern Mahoning County appear to be back on track, according to documents obtained by The Business Journal.
A Capital PEC Report published by Industrial Info Resources Inc., based in Sugar Land, Texas, shows that Blue Racer would like to begin construction on a $70 million natural gas processing plant just outside Petersburg in Springfield Township by September 2015.
The report was last updated in April, and states that preliminary design of the $70 million plant would continue through March and construction bids would be released by next June. Completion of the plant is scheduled for June 2016, documents show.
“Our understanding is that everything looks on board and is going great,” confirms Don Crane, president of the Western Reserve Building and Construction Trades Council. “We’re trying to get everything under wraps now.”
Crane cautions there’s still much more work to do and the project is in its early stages. Further, there’s no confirmation that the project would employ union members, but he says he’s confident that the building trades will be well represented.
“We don’t really have that much information,” Crane says. “It sure seems good, and the trades feel that they’re going to be strongly involved.”
Generally, processing plants such as these don’t create a large number of permanent jobs, but the number of tradesmen employed on these projects number into the hundreds, Crane notes.
“After each craft has had time on the site, we could have as many as 600 working there,” he says.
Work on gas processing plants and pipelines around the region has led to more man-hours for members of the building trades and expanded their ranks.
“We’ve been able to increase membership and apprenticeships,” Crane says. “Our hours are through the roof at the moment.”
Blue Racer’s plan calls for constructing a cryogenic processing plant that would separate dry gas from wet gas drilled from the Utica shale. The Petersburg plant would hold a capacity to process 200 million cubic feet of natural gas per day.
Calls to the company seeking comment on the project were not returned.
Blue Racer Midstream – a joint venture between Dominion and Caiman Energy – announced in 2012 plans to develop a processing and pipeline network in the northern Utica as part of a larger system it’s creating across the entire play in eastern Ohio.
Most of Blue Racer’s interest and activity is now concentrated in the southeastern tier of the Utica play, where well results are much more favorable. The company has added capacity to its processing plant in Natrium, W.Va., and is constructing two cryogenic processing plants in Ohio – one in Monroe County and another in Harrison County.
Blue Racer has taken a wait-and-see position in the northern Utica, assessing how this section of the play produces before it moves forward on any additional work.
Energy giant BP America announced in April that it would abandon its leasehold positions in the Mahoning Valley because of poor well results in the northern portion of Trumbull County.
Houston-based Halcon Resources also announced it would suspend new drilling activity in the north. The company has drilled two wells in Lordstown Township in Trumbull County and two in Jackson Township in Mahoning County.
A series of recently signed easement assignments across Mahoning County – from Dominion Natrium Holdings Inc. to Blue Racer Midstream LLC – show the company hasn’t given up on the northern Utica and is moving forward with its plan to develop a pipeline network by acquiring rights of way to complement any additional processing capacity.
In late March, Dominion assigned 235 easements that comprise its Northern Gas System to Blue Racer, according to documents filed with the Mahoning County Recorders office. The easements include properties in Springfield, Green, Jackson, Ellsworth, Goshen, Canfield, Boardman, Berlin, Smith and Poland Townships.
Meanwhile, at least one energy producer isn’t deterred from the northern Utica’s limited production. Hilcorp Energy Co. is still very much active in this section of the play, as evidenced by its drilling program in Lawrence and Mercer counties, just across the Ohio state line in Pennsylvania. Hilcorp has also drilled a handful of wells at the Carbon Limestone site in Poland Township, Ohio. One of the Poland wells proved to be the most productive well in Trumbull and Mahoning counties, producing 132 million cubic feet of natural gas over 89 days.
These wells are tied into a $300 million pipeline and processing network, the Hickory Bend project, a joint venture between Hilcorp and NiSource Midstream that stretches from Mercer County to Columbiana County in Ohio.
That project includes a now-finished $150 million cryogenic processing plant in Springfield Township that’s similar in capacity to what Blue Racer’s Petersburg plant would hold.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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