$900M Gas-Processing Operation Planned In Ohio

Oklahoma City-based Chesapeake Energy Corp. said the plants will process resources extracted by various companies from the Utica Shale.

COLUMBUS, Ohio (AP) โ€” A group of companies is planning a $900 million project for processing natural gas and natural gas liquids in eastern Ohio, with some operations expected to begin next year.

The plans announced late Tuesday by Oklahoma City-based Chesapeake Energy Corp. include facilities for natural gas gathering, compression and processing. A facility in Columbiana County will process natural gas extracted by various companies from Ohio's Utica shale. A separate complex in Harrison County will receive and process natural-gas liquids such as propane and butane extracted from the shale.

Chesapeake's subsidiary, Chesapeake Midstream Development, is developing the project with M3 Midstream LLC and EV Energy Partners L.P. The trio and affiliates own rights to drill more than 2 million acres in Ohio, according to the Akron Beacon Journal.

The project will provide "hundreds of high-quality, well-paying, new jobs for Ohioans" and provide an economic boost for companies, Mike Stice, president of Chesapeake Midstream Development, said in a statement.

He did not provide a specific number of jobs to be created or specific locations for the facilities.

The Columbiana County processing facility will have an initial capacity of 600 million cubic feet of gas per day, while the Harrison County site will have a capacity to store 870,000 42-gallon barrels and process 90,000 barrels a day, the companies said. The Harrison county facility also will feature a rail-loading facility.

"I'm happy they are locating it in Ohio and are employing Ohioans," Jerry James, president of the Ohio Oil and Gas Association, told The Columbus Dispatch. He said the Columbiana County plant will be the largest of its type in the state.

While the entire project will be rolled out over five years, parts of the complex are scheduled to be in service by June 2013.

Columbiana County officials said they provided no economic incentives to the companies.

"We knew about it, but we didn't have to say anything other than 'Go, guys, go,'" Tracy Drake, executive director of the Columbiana County Port Authority, told The Vindicator of Youngstown.

Messages left for Harrison County officials were not immediately returned Wednesday.

A study by three Ohio universities predicted last month that the state's Utica shale would create 65,000 jobs by 2015, along with $9.6 billion in related economic development.

Environmentalists and others in the state have concerns over the hydraulic fracturing drilling process used to extract oil and natural gas from shale. That technique blasts the shale with chemical-laced water.

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