LORDSTOWN - Plans for a $70 million oil storage and rail-loading terminal are in the works for Lordstown with the first part of the three-phase project expected to be complete in 2014.
A subsidiary of Houston-based Halcon Resources plans to build the terminal inside the Ohio Commerce Center industrial rail park along state Route 45 in Lordstown. The village's board of zoning appeals this month approved a variance requested by property owner George Bakeris allowing construction of up to six tanks, each able to hold up to 90,000 barrels of crude or other petroleum-based products extracted from the Utica Shale Play.
The crude would be transported by truck, rail or pipeline to the center, where it would be stabilized and stored for rail shipment to the East and Gulf coasts, where there is higher demand and refineries able to handle lighter crudes like those expected from the Utica Shale.
"The facility will make it possible for Halcon and other operators to ship the oil they're producing to markets outside the production area for sale," a fact sheet released by local Halcon spokesman Vince Bevacqua stated. The company said the Ohio Commerce Center is the only existing midstream facility in the district able to accommodate the company's needs.
The project is still in the planning stages, according to the company and the Ohio Commerce Center's leasing agent, Dan Crouse of Routh-Hurlbert Real Estate.
"Everything is not yet complete, but in the works," Crouse said Friday. Once a lease agreement is finalized, the permitting process will begin through the Ohio Environmental Protection Agency, Lordstown village zoning and Trumbull County Building Department.
If approved, the new facility would mean about 30 permanent full-time jobs, and about 50 construction jobs.
Lordstown planning and zoning administrator Dave Harrison said the company has made it known that they will not seek tax abatements on the project. The project would translate to property tax on the improvements and local income tax on the wages.
"For our schools, that's a lot of help with this type of investment," Harrison said.
In addition, Halcon said the proposed operations will make "long-term contributions to economic development in Lordstown, which may positively affect adjacent property values."
Once completed, the terminal would house four bay truck racks able to unload up to 12 trucks an hour, a loading platform capable of handling 20 rail cars, three condensate stabilizers and six 50-foot-high-by-125-foot-wide storage tanks.
A stabilizer is equipment that captures condensate that otherwise would burn off into the environment and instead converts it to a valuable product.
"It's good for business and good for the environment," said the statement provided by Bevacqua.
Harrison said no adjacent property owners spoke in opposition to the zoning variance proposal, which passed unanimously on July 8.
Halcon has said fuel depots like this are safe to build and operate. The company said facilities like this are designed, built and operated to minimize risk of explosion and comply with public safety regulations. The construction also will include state-of-the-art "vapor destruction units" and combustible gas detectors to monitor volatile gases.
Halcon Field Services has an unblemished safety record for 2012 and 2013, the company said.
Harrison said recent visits to two nearby petroleum storage facilities in Niles and Brimfield Township helped ease his concerns and convince him that the facility would be safe.
Operators of the Brimfield facility, Harrison said, installed a fire protection and suppression system and offer specialized training to area firefighters.
The Niles Buckeye Terminals located off U.S. Route 422 also holds special trainings and regular roundtable discussions with fire officials on safety issues, said Niles fire Chief Gary Brown. Brown admits, though, that an emergency at the Niles facility is always on his mind.
"In my 30 years here, that was always my biggest concern, but we have never had a problem," Brown said. The chief noted that a fire or explosion would likely require assistance from the Vienna Airlift Station fire department which is better equipped to handle burning petroleum products.
Halcon's push into the Utica Shale Play so far has focused solely on the Mahoning and Shenango valleys. Within the last year the company has drilled three horizontal Utica Shale wells in Trumbull County, including one in Lordstown, and at least three others in adjacent Mahoning and Mercer counties.
Halcon stated a terminal in such close proximity to production also will translate into more money for landowners holding the mineral rights.
"This development will result in lower marketing, transportation and distribution costs, which will bring higher netback prices to producers and higher royalty payments to mineral rights owners," Halcon said in its statement.
And it's good for development at the Commerce Center, Crouse said.
"This clearly exploits the value that's the Commerce Center," Crouse said. "All of that rail, all of that land, all of that roadway infrastructure, that's what that center was built to do, and we are not done yet."
Harrison, who also acts as the village's director of economic development, expressed his excitement with the proposal and all area economic growth stemming from development of the Utica Shale.
"In my opinion, this is great for our area," Harrison said. "Shame on us if we do anything to prohibit this - the whole industry. We are finally looking at jobs again."