Pumping the gas

First, there was the mad rush to stake claim on mineral rights for thousands of acres in the Utica Shale Play. Now there is the wait. Energy companies working to free oil and natural gas trapped miles below the earth’s surface in eastern Ohio and western Pennsylvania are showing signs of success, but the lack of infrastructure needed to ship those products to market is leaving potential buyers anxiously waiting in other parts of the United States.

That wait will continue for a little while longer.

“The tie-in of the wells is taking a bit longer. There’s just a lack of pipe up there and their infrastructure. Further south, we will get hooked on a lot faster,” Floyd Wilson, chairman and chief executive officer of Houston-based energy company Halcon Resources, said during a conference call last week.

Halcon has drilled nine wells in Trumbull and Mahoning counties in Ohio and Venango and Mercer counties in Pennsylvania. Only one is online, with production hindered largely by the lack of pipeline infrastructure, Wilson said.

In the meantime, welders, pipefitters and steelworkers are working as fast as they can to link the newly drilled wells to markets mostly in southern United States and even the Gulf of Mexico.

“Just imagine, we are now sending gas to the Gulf. Nobody in our company would have ever thought that would happen,” said Elie G. Atme, director of business development for Spectra Energy.

Spectra Energy is a Houston-based company developing the new Ohio Pipeline Energy Network, or OPEN, that will cross 70 miles from Columbiana County to southern Ohio, where it will connect with the Texas Eastern System that moves dry gas products to the Gulf coast.

“This gas is so prolific we have to find out new ways to move it,” said Susan D. Waller, a vice president with Spectra Energy.

That’s because different wells are producing different types of natural gas products, some considered a pure dry gas and others that contain “wet gases” like propane, butane or ethane. Those products are separated and transported in other pipelines to be used in the manufacture of plastics and other products or for new power generation mostly in the southern U.S.

“This gas can make its way eventually west if it needs to, through other pipelines. In the winter, the gas will be used here, but in the summer it will go elsewhere,” Atme said. “As production continues to grow, they are going to need new steel in the ground, and we are that new steel in the ground.”

Already years in the works, Spectra’s OPEN transmission line is not expected to be complete until 2015. And it is just one of several pipelines being built by various companies.

Another, the Bluegrass Pipeline, is projected to run 1,100 miles along existing corridors from the Marcellus and Utica Shale region to the Gulf Coast, according to its developers, Williams and Boardwalk Pipeline Partners LLC.

And Shawn Bennett of Ohio Energy in Depth, an industry-based public outreach campaign, points to plans to relieve a bottleneck of natural gas liquids being produced in the Marcellus and Utica Shale Plays include construction of the Appalachia-to-Texas Express, or ATEX, Pipeline.

But to get the products linked into these larger transmission pipelines, it must first travel from the wellhead through a maze of smaller “gathering” lines, many of which are also now under construction in rural areas of Trumbull and Mahoning counties. Locally, companies like Halcon and Dominion East Ohio are doing their part to make the connection.

A Halcon subsidiary has sought easements mostly on private property, while energy giant BP has contracted with Dominion to provide many of its lines, according to Trumbull County Engineer’s Office official Jack Simon. As a public utility, Dominion East Ohio is able to lay gas pipelines along roadways in the public rights of way.

Dominion officials declined to comment on specific projects in Trumbull County, citing proprietary reasons. Overall, though, the company said it has more than 1,400 miles of gathering lines within its system.

“Utica development in Mahoning and Trumbull County is in its infancy and producers are drilling their first wells in the area to determine if it is economical to develop. If it proves to be economical, the amount of new infrastructure could be comparable to other counties where producers are in development, such as Carroll County,” a Dominion spokesman said in response to emailed questions.

Likewise, Halcon’s CEO points out limits created by the lack of existing infrastructure. Halcon’s Brugler Well in Hartford Township – drilled in December as the first Trumbull County Utica Shale well – for example, remains off line due to the lack of infrastructure in northern Trumbull County.

“We will get those wells on line and report as soon as they are on line,” Wilson said.

Still, the race in planning continues.

“There is a race going on, but the big question is how much production will there be?” Atme said. “It takes about three years to build a (transmission) pipeline. We are a very conservative business. We don’t build a pipeline on speculation.”