MOUNDSVILLE - The Marcellus Shale natural gas rush sweeping the region will result in billions of dollars worth of lease revenue, production royalties and other associated economic activity.
However, the gas boom also has the potential to revive the area's sagging industrial base, as natural gas processing facilities are being built to accept the gas once drillers such as Chesapeake Energy, Trans Energy and AB Resources extract it from the ground.
Companies such as Caiman Energy, Dominion Transmission and MarkWest Liberty Midstream & Resources are engaging in the business of processing gas byproducts, known as natural gas liquids. Hundreds, if not thousands, of local jobs could be created at these and other facilities over the next several years, according to industry officials.
Dallas, Texas-based Caiman Energy’s Fort Beeler cryogenic processing facility, roughly nine miles southeast of Moundsville on U.S. 250 in Marshall County, is complete.
Also, one of the region's chemical companies - Bayer - is working with local officials to help land what's known as an "ethane cracker" facility, which would convert ethane - a component of natural gas found in the local area - to ethylene, which is used to make plastic. Bayer and PPG use ethylene to help make their products.
If such a facility were to locate here, it could mean hundreds, if not thousands, of new jobs, and also help boost the chemical industry by cutting what it pays currently to receive ethylene.
One of the local groups playing a role in the possible development of natural gas facilities is the Wheeling-based Regional Economic Development Partnership. Executive Director Don Rigby earlier this month addressed members of the West Virginia Legislature on the potential the industry has for the Northern Panhandle.
Does the Upper Ohio Valley's natural gas boom have the potential to revive the area's industrial base?
Yes, as natural gas processing plants such as Caiman Energy's Fort Beeler cryogenic processing facility and Dominion Transmission's plant are leading to increased job opportunities. Local officials also have been working to land a "cracker" facility that would convert ethane - a component of natural gas found in the local area - to ethylene, which is used to make plastic. Bayer and PPG use ethylene to help make their products.
"We believe we're poised to capitalize on a tremendous opportunity for West Virginia," Rigby said. "We need to make sure (gas companies) know they're welcome here. We need to make sure they know they can be competitive here. ... Let's make sure we court these folks."
Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association, said "tens of thousands of new jobs will be created in the (Marcellus Shale) formation," which extends from New York through Tennessee.
"Marshall and Wetzel counties in West Virginia are home to some of the best rich gas resources in the entire play. We will continue to develop and grow our assets as drilling activity expands, driving increased requirements for gathering, processing, and access to high value markets," added Caiman President and CEO Jack Lafield.
So with all the electrical and chemical plants already located on the Ohio River bank in Marshall and Wetzel counties, there will soon be multiple facilities employing people to process the natural gas.
"Natural gas processing consists of separating all of the various hydrocarbons and fluids from the wet natural gas, to produce what is known as 'pipeline quality' dry natural gas. ... While the ethane, propane, butane, and pentanes must be removed from natural gas, this does not mean that they are all 'waste products.' ... Natural gas liquids can be very valuable byproducts of natural gas processing. ... These NGLs are sold separately and have a variety of different uses; including enhancing oil recovery in oil wells, providing raw materials for oil refineries or petrochemical plants, and as sources of energy," Lafield said.
About 9 miles southeast of Moundsville, Caiman's Fort Beeler cryogenic facility is now ready for operation.
Caiman is also building a 25-mile natural gas liquids pipeline that will connect the Fort Beeler plant with a fractionation facility under construction on the Ohio River in Marshall County. Construction of the 12,500-barrels per day fractionation plant and the NGL pipeline will be completed in June. In all, Caiman expects to invest about $350 million in the local area for pipelines and the processing facilities.
Dominion recently announced plans to build a natural gas processing plant in Marshall County along the Ohio River on property now owned by PPG Industries. Upon completion, this plant could employ as many as 55 people, and process up to 300,000 cubic feet per day of natural gas.
"Further development of the Marcellus Shale demands additional processing and fractionation capacity," said Paul Ruppert, senior vice president of Dominion Transmission, the interstate gas transmission subsidiary of Dominion Resources Inc.
Dominion's facility is designed to phase in service for processing up to 300,000 cubic feet per day of natural gas. Fractionation capacity for up to 38,000 barrels per day of natural gas liquids would be available.
Also, MarkWest announced plans to provide gas processing services to Chesapeake at MarkWest's Majorsville complex, which includes a 135 million cubic feet per day cryogenic gas processing plant that now operates near capacity. The company is close to finishing a second such facility with equal processing power in the Majorsville area, with the possibility of building a third plant.
According to the company, MarkWest is engaged in the gathering, transportation and processing of natural gas; the transportation, fractionation, marketing and storage of natural gas byproducts; and the gathering and transportation of crude oil. The firm has extensive natural gas gathering, processing and transmission operations in the southwest, Gulf Coast, and northeast regions of the United States, including the Marcellus Shale, and is the largest natural gas processor in Appalachia.
As for Caiman, Lafield said, "We are very pleased with the significant scope and pace of our expansion in the Marcellus. We are committed to meeting the needs of our dedicated producer base."
Lafield said that by year's end, he expects his company to have invested $400 million for Marcellus Shale infrastructure, much of which will be in West Virginia's Northern Panhandle.