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Chesapeake still finalizing purchase of property for plant

March 22, 2012
By TOM GIAMBRONI - Staff Writer ( , Morning Journal News

KENSINGTON - Construction of a shale gas collection and processing plant could begin within two months at the yet undisclosed location, according to officials who attended this week's meeting of Hanover Township trustees.

Attending the meeting to brief trustees on the proposed project were Keith Fuller, director of corporate development for Chesapeake Energy Corp.; Scott Hallam, manager of development and operations for Chesapeake subsidiary Chesapeake Midstream Development; Joe Giles, vice president of operations for Momentum/M3 Midstream LLC; and Larry Reddell, a field agent for Independent Land Services.

Chesapeake Midstream is the majority partner in the joint venture to build the $400 million collection and processing plant, with the others being Momentum and EV Energy Partners.

Momentum is to run the plant and Giles said he will be in charge. The plant is to be built over five years, with the first phase of the complex scheduled to become operational in May 2013. Construction would take 12 months, although there was no firm start date since they have yet to close on the property.

The big question on the trustees' minds is the exact location of the plant. A map on M3 Midstream's website shows the plant being located in the Kensington area, but officials said they were still in negotiations to acquire the property and were prevented from identifying the location until the deal is concluded.

"We have a confidentiality agreement on the option, so I really can't," Giles said.

Reddell and Giles both said much thought went into picking a location that would not only serve their needs but also have the least impact on the fewest residents.

"When you consider all of the alternatives, I think we did a good job of picking a place" that meets the criteria, Reddell said.

Trustees then asked about the amount of land being sought, which others have confirmed is expected to total about 170 acres. When officials were hesitant to answer, Trustee Donald "Ferg" Wilson asked, "A hundred acres or more?"

Reddell said they could not get into specifics until the property has been acquired.

Giles agreed with Reddell about wanting to be good neighbors and they will do everything possible to minimize traffic and noise. "We don't want to be a nuisance," he said.

The complex will serve as a collection and compression site for natural gas extracted by drillers in the region, with an initial processing capacity of 600 million cubic feet per day. The site will include a cyrogenic processing plant to extract natural gas liquids (NGLs) from the shale gas, with the NGLs transported by underground pipe to a $500 million storage and transfer hub being constructed in Harrison County as part of the same project. The dry natural gas will be transferred to a local natural gas pipeline.

Hanover Fire Chief Tim Wood and several other firefighters attended the meeting, and they were mindful of the natural gas pipeline explosion that occurred in the township 13 months ago. They said the pipeline company had little contact with them.

"We'll be happy as long as we're in the loop," Wood told them.

Giles said they intend to meet with all appropriate emergency response agencies and keep them informed of what is going on. He said if there were a fire at the complex they have an automated system that would shut down the entire operation, thereby isolating the fire.

"And then we may call on you, or we may not and just let it burn out," Giles said.

Columbiana County Commissioner Mike Halleck attended the meeting and described Chesapeake as a "first class" company based on his dealings with them to date. "We are very excited about this project," he said.



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