YOUNGSTOWN, Ohio -- Exterran Energy Solutions LP hopes to be operating in its proposed new facility here by the fourth quarter of the year, turning out equipment used by the oil and natural gas industry.
The Houston-based company, a unit of Exterran Holdings Inc., manufactures equipment used above ground during the extraction process, conditioning the extracted natural gas for end use by customers.
The company plans to build a $13.2 million, 65,000-square-foot facility on a 20-acre parcel at the Salt Springs Road Industrial Park that previously had been set aside for Exal Corporation to build an additional plant. When Exal could not commit to a timeline for the project, the city, which owns the property, made the land available for Exterran.
Two factors drove the company's decision to look at Youngstown, said Susan Moore, Exterran vice president, corporate communications -- proximity to its customer base and "the availability and quality of the local work force," she remarked.
"A lot of our customers are very active in the region" in the Marcellus and Utica shale plays, she said. Youngstown is "a very ideal location for us."
Exterran intends to hire 100 people for the facility over three years, Moore said. Positions to be filled include welders, electricians, pipe fitters, millwrights and material handlers, she said.
"We expect it will be operational in the fourth quarter of 2012," she said, a goal she acknowledges is ambitious.
The city is providing Exterran with the land for the facility as well as a 75% tax abatement for the facility, said T. Sharon Woodberry, city economic development director.
On Friday, the city's Board of Control approved a limited warranty deed for Exterran, as well as an assignment agreement. The agreement assigns to Exterran the city's rights to approve any drilling activity on the site associated with an existing oil and gas lease tied to the property.
The city acquired those rights when it purchased the property -- part of a total 68 acres of land -- from Lafarge North America using funds from a Job Ready Sites grant awarded by the state in 2008.
Chesapeake Energy Corp. and Duck Creek Energy had the rights to drill on parts of the property and Exterran "wouldn’t have finalized the project if the knew they were going to be drilling," Mayor Chuck Sammarone said following the board of control meeting. "That was the holdup before Exterran would move forward."
Chesapeake and Duck Creek also signed papers assuring the city and Exterran that they weren't going to do any drilling, he added.
"We have the right to approve any drilling so we're assigning the rights to Exterran -- and they can say 'no,'" said Anthony Farris, city law director.
The "last step" will be what Moore described as a "review by the state" on Feb. 27. Both the State Controlling Board and the Ohio Tax Credit Authority meet that day.
Last week Exterran announced that Boardwalk Pipeline Partners, L.P. has selected the company to design, manufacture and construct a natural gas processing plant in South Texas. The project includes engineering, procurement and construction of a cryogenic gas processing plant with a capacity of 150 million standard cubic feet of natural gas per day produced from the Eagle Ford shale.
Exterran says it has built more than 300 gas processing facilities worldwide; the company/and its predecessor companies have approximately four decades of experience in the design, engineering, fabrication, installation and safe maintenance of gas processing facilities and have completed more than 300 of these facilities worldwide. The company employs 10,000 in 30 countries.
Copyright 2012 The Business Journal, Youngstown, Ohio.