Ohio Gov. John Kasich's hoped for shale gas drilling boom in Ohio won't happen unless there are gas processing plants to clean up the hydrocarbon as it comes out of the ground. Now a major "midstream" player in the gas industry has stepped up to build two processing complexes in Harrison and Monroe counties.
View full sizeThe MarkWest gas processing plant in Majorsviille, W. Va. Gov. John Kasich's dream that economic development will flow from new gas and oil wells in Ohio is beginning to take shape.
The governor Tuesday announced the construction of two gas processing complexes in Harrison and Monroe counties during his state of the state speech in Steubenville.
MarkWest Energy Partners L.P., a publicly traded master limited partnership, has joined with another firm for the projects, which state officials estimate will cost about $500 million.
Two of the facilities will separate the natural gas from other hydrocarbons and oils that are expected from the "wet gas" that flows from Utica shale wells. In the industry, these are called processors.
A third unit, called a fractionation complex, will separate the oils from other hydrocarbons such as ethane, which is the basic feedstock for the plastics industry and very valuable.
Construction of the two complexes and connecting pipelines is expected to employ about 700 people. Once built, the facilities will initially employ only about 40.
"You don't need a lot of people on these systems," said David Mustine, head of JobsOhio.
"But if we don't have these midstream investments, we don't develop Utica shale. These are a key to the development. And these permanent jobs are good jobs."
The companies have not yet released the exact locations of the two complexes but plan to have them operating by 2013.
The Harrison County complex will be designed to process up 200 million cubic feet of gas per day and 100,000 barrels of oil and other liquids per day, the company said. The Monroe County complex is still under design.
If well drilling proceeds as expected, MarkWest said it expects to build more processing and fractionation complexes in the region.
Mustine said there are also other companies interested in building similar processing facilities in Ohio.
"This development is a positive sign, and is the first firm commitment to Ohio," he said.
"These midstream complexes are needed to support a cracker," he added, referring to the very large multi-billion dollar refinery-like complex that a Shell Oil Co. is considering building in Ohio, Pennsylvania or West Virginia to further refine ethane into ethylene for the chemical industry.