YOUNGSTOWN, Ohio -- Chesapeake Energy Corp. today announced that through its wholly owned subsidiary, Chesapeake Midstream Development LP, it is joining with M3 Midstream LLC and EV Energy Partners LP, both based in Houston, to build a $900 million integrated midstream service complex in Columbiana County.
The specific location of the huge complex was not announced. Sources indicate it is near the Carroll County border, around the town of Hanoverton.
The midstream service complex will consist of natural gas gathering and compression plants constructed and operated by Cheapeake, as well as processing, natural gas liquids fractionation, loading and terminal facilities constructed and operated by Momentum.
The cryogenic processing plant will have an initial capacity of 600 million cubic feet per day. Natural gas liquids (NGL)will be delivered to a central NGL hub complex in Harrison County that will feature an initial storage capacity of 870,000 barrels and fractionation capacity of 90,000 barrels per day, as well as a substantial rail-loading station, the companies said.
The partnership plans to invest approximately $900 million over the next five years with the majority of the capital invested the first two years, according to a joint statement from the venture partners. "Significant engineering and procurement has already begun for the project with the first cryogenic processing and fractionation plants scheduled to be in service by the second quarter of 2013," the companies said.
The announcement comes hours after Gov. John Kasich joined the CEO of MarkWest Energy Partners LP of Denver, Frank Semple, for a press event celebrating MarkWest’s planned construction of a gas processing plant in the Harrison County seat of Cadiz. MarkWest also plans to build a second processing plant in eastern Ohio as well as a fractionation plant. Its Cadiz plant is expected to also go into operation in 2013.
“We intend to spend $500 million in the state of Ohio,” Mark West's Semple said.
Shale gas processing plants separate wet gas from dry gas; fractionation plants separate the wet gases (natural gas liquids) – propane, butane and ethane.
In its announcement, the president of Chesapeake Midstream Development, Mike Stice, said the Columbiana County complex is “a critically important link in the value chain for the rapidly developing Utica Shale play. …The scope of this project will provide an economic boost for companies and residents throughout Ohio as well as hundreds of high-quality, well-paying, new jobs for Ohioans.”
Copyright 2012 The Business Journal, Youngstown, Ohio.