As Gulfport Energy continues drilling profitable Utica Shale wells across eastern Ohio, MarkWest Energy plans to build about $1.8 billion worth of new infrastructure this year to process the gas.
"In 2012 we invested almost $2 billion on strategic growth projects primarily in our Marcellus and Utica business units and in 2013, we expect to invest between $1.5 and $1.8 billion on additional capital projects, which are supported by long-term, largely fee-based contracts," said Frank Semple, chairman, president and chief executive officer of MarkWest Energy.
One MarkWest facility is already operating near Cadiz, though the plant will soon increase its capacity to separate dry methane from liquid ethane, propane, butane and pentane. Hundreds of construction workers and pipeliners are now working at the plant and should continue doing so until 2014. The company is now building a fractionator - a machine that will further process these materials into marketable items - near Hopedale, which will connect to the Cadiz plant via pipeline.
MarkWest is also building a network of pipelines throughout eastern Ohio, including some in the Flushing area of Belmont County. The company processes gas for producers such as Gulfport and Antero Resources, both of which are active drillers in the area.
MarkWest also processes gas in West Virginia at the Mobley site in Wetzel County and the Majorsville complex in Marshall County, working for producers such Magnum Hunter, Consol Energy, Noble Energy and Range Resources.
"The acceleration of our Utica midstream development is a direct result of the ongoing success of our producer customers' drilling programs," said Semple.
According to MarkWest, the Cadiz processing complex will include a de-ethanization facility where purity ethane will be produced and delivered into the ATEX Express ethane pipeline. This pipeline will transport ethane from the Utica and Marcellus shale regions to the Gulf Coast for cracking.
The Gulfport gas that MarkWest is processing is abundant, as a single well near Barnesville could be producing as much as $100,000 worth of revenue per day. Also, Gulfport's Clay well - located in the area of U.S. 22 and Ohio 800, near the northern portion of Piedmont Lake in Harrison County - is producing daily averages of 747 barrels of condensate, 761 barrels of natural gas liquids and 5.9 million cubic feet of natural gas.
These wells are in addition to the company's "monster" - as labeled by energy investment firm Global Hunter Securities - Shugert well that has been producing as much as 28.5 million cubic feet of gas per day from the Egypt Valley area near Morristown.
Many eastern Ohio residents who originally signed leases with Wishgard LLC or Tri-Star Energy have seen those contracts turned over to Gulfport, while Gulfport has also signed many county landowners to their own leases. Terms of the leases can range widely depending upon when they were signed and a multitude of other factors.
However, some property owners have received at least as much as $5,900 per acre, with as much as 20 percent of the production royalties.