Texas Oil and Gas Attorney Blog
A new gas pipeline is planned through Texas to bring natural gas to the Gulf coast. Two companies, Kinder Morgan and MarkWest Utica EMG, have entered a joint venture for a 1,100 mile gas pipeline and to develop a fractionation plant on the Gulf coast. The facility and pipeline will process and transport liquid natural gas from the Utica and Marcellus shales in Ohio, Pennsylvania, and West Virginia.
Kinder Morgan’s CEO Richard Kinder issued a statement that “(t)he combination of Kinder Morgan’s strategically located and existing pipeline assets that traverse through the heart of the Utica and Marcellus shale plays, along with MarkWest’s existing and significant midstream footprint throughout the Utica and Marcellus shale plays, should provide significant growth opportunities for the (joint venture).”
A gas complex is planned to be built in Tuscarawas County, Ohio. The complex, on a 220 acre piece of land for which Kinder Morgan has an option, will have a 400 million-cubic-foot-per-day (MMcf/d) cryogenic processing facility. It can be expanded to accommodate one billion cubic feet per day. The first processing plant is expected to be completed by the fourth quarter of 2014. The companies are also exploring options to increase fractionation capacity in the Gulf region. MarkWest is planning to install a de-ethanization plant in its Seneca complex as well, after starting up a de-ethanization plant in Houston, Pennsylvania in July 2013. MarkWest is also expanding a gas processing plant at Mobley in West Virginia, as well as expanding at other facilities in Pennsylvania and West Virginia.
For the pipeline, 900 miles will be repurposed pipeline that already exists in the Kinder Morgan system and about 200 miles will be new pipeline. The current pipeline is from Ohio to Natchitoches, Louisiana. Discussing the use of an existing pipeline, Kinder Morgan spokesman Richard Wheatley said, “(t)hat’s one of the benefits. That we already have an easement, we just need to file with appropriate agencies for conversion of the line.” The new line will go to Mont Belvieu, Texas, and also possibly further in south Louisiana. It would build on the gathering system already in place in Ohio’s Harrison, Belmont, Guernsey, Noble and Monroe counties and expand to Carroll, Columbiana, Mahoning and Trumbull counties. The completed pipeline will be expandable to 400,000 bbl/d and will have additional pump stations. The newly completed pipeline is expected to begin service in the fourth quarter of 2015.
The investment in the pipeline will be 75% Kinder Morgan and up to 25% MarkWest. The pipeline will be operated by Kinder Morgan. The processing plant in Ohio would be owned 50-50 between the two companies. The costs of these projects were not disclosed.
This is good news for America’s oil and gas industry overall and demonstrates that the investment commitment of companies in the energy sector remains strong. If you have any questions about a pipeline easement that may cross your land as expansion of the industry continues, a Texas pipeline attorney can help you understand your options.
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