MarkWest Sherwood Gas Processing Complex on US Route 50 in Doddridge County, WV

This Article is from the Kallanish Energy News, April 5, 2018

NORTH CANTON, Ohio — After record-setting natural gas and natural gas liquids processing in 2017, MarkWest Energy Partners continues to invest heavily in the Appalachian Basin.

The midstreamer added two natural-gas processing plants in West Virginia in 2017 and plans to add six more in 2018: four in West Virginia and two in Pennsylvania, said company spokeswoman Tina Rush, at the Utica Midstream conference at Walsh University in North Canton, Ohio.

Kallanish Energy attended the one-day program, presented by ShaleDirectories.com and the Greater Canton Chamber of Commerce. MarkWest built three fractionation facilities in 2017: one each in Ohio, West Virginia and Pennsylvania. It plans to add three more in 2018: one in each of the three states, Rush told the 130 people attending the conference.

“The growth is still there,” Rush said on the increasing demand for processing and fractionation in the Appalachian Basin. Estimates are that 45% of natural gas growth in the U.S. will occur in the Northeast, she said.

The new plants in the Utica and Marcellus shales are part of MarkWest’s 2018 projects with a combined $2 billion price tag, she said.

The company set a record in the fourth quarter of 2107, gathering 2.7 billion cubic feet per day (Bcf/d) of natural gas and processing 5.2 Bcf/d, according to Rush.

Gathering volume was up 19% and processing volume was up 14% over 2016, she said. The company also processed 389,000 barrels per day (BPD) of liquids in Q4, also a company record. That was an increase of 19% over Q4 2016.

The Marcellus and Utica shales account for 65% of the company’s gathering, 70% of its processing and 90% of its fractionation, Rush reported.

The company’s Sherwood plant in West Virginia is now the fourth-largest such facility in the U.S. By late 2018, that plant is expected to be the No. 1 processing plant in the country, and is projected to be the No. 1 plant in North America by the end of 2019, Rush said.

Appalachian Basin projects, plus additions in the Permian Basin in West Texas and New Mexico, will boost MarkWest’s natural gas processing capacity by 1.5 Bcf/d, and fractionation capacity by 100,000 BPD of liquids, she said.

Marathon Petroleum, the parent company of MarkWest, is looking at moving Appalachian Basin butane by pipeline to as many as 10 Midwest refineries, said Jason Stechschulte, commercial development manager for Marathon Pipe Line.

The company now moves condensate and natural gasoline via pipelines from the Utica Shale in eastern Ohio to refineries in western Ohio, Michigan and Illinois. Butane would be shipped in batches in that pipeline system and additional connections could be made to other pipelines moving butane, Stechschulte said.

Under pressure, butane would flow as a liquid in the pipelines, he said. The butane would be used to blend with gasoline to make winter fuels at company refineries. Such shipments are a year or two away and would require the addition of storage facilities at the refineries, he said.

Marathon is also looking at extending its liquid pipelines into southeastern Ohio to reach other processing/fractionation facilities, Stechschulte said.

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### MarkWest Sherwood Plant helps growth and development in Doddridge County ###

From an Article by Kirsten Reneau, Clarksburg Exponent-Telegraph (WV News), March 29, 2018

WEST UNION — The MarkWest Sherwood Complex continues to help the residents of Doddridge County in a variety of ways through the site’s work in oil and gas.

MarkWest is a wholly-owned subsidiary of MPLX. The Sherwood Complex first began operations in October 2012, said Jamal Kheiry, communications manager for Marathon Petroleum Corp. “MPLX’s natural gas processing complexes remove the heavier and more valuable hydrocarbon components from natural gas,” Kheiry said.

Photos: The Sherwood Processing Facility — Three more processing plants were added to the MarkWest Sherwood facility this past year.

In 2017, through a joint venture between MarkWest and Antero Midstream, the company was able to add three more gas processing plants, with the capacity of processing 200 million cubic feet of gas every day. Last year, the company invested $200 million in construction.

“The Sherwood Complex now processes natural gas in nine processing plants, with a total capacity of 1.8 billion cubic feet per day,” Kheiry said. “Sherwood also includes a 40,000 barrel per day de-ethanization unit, which separates ethane from natural gas.”

There is still more construction underway at Sherwood, with plans to build two more gas processing plants with the capacity of 200 million cubic feet per day through a joint venture with Antero Midstream. “These new units support development of Antero Resources’ extensive Marcellus Shale acreage in West Virginia,” Kheiry said.

“The new gas processing plants are expected to be complete this year. There is also the potential to develop up to six additional processing facilities at Sherwood and at a future expansion site. Separate from the joint venture with Antero, MarkWest is also building a 20,000-barrel per-day ethane fractionation plant.”

He explained that natural gas production begins with the drilling of wells into gas-bearing rock formations, and a network of pipelines (also known as gathering systems) directly connects to wellheads in the production area.

“These gathering systems transport raw, or untreated, natural gas to a central location for treating and processing. A large gathering system may involve thousands of miles of gathering lines connected to thousands of wells,” Kheiry said.

Next comes compression, a mechanical process in which a volume of natural gas is compressed to a higher pressure. This allows the natural gas to be gathered more efficiently, as well as delivered to a higher pressure system.

“Field compression is typically used to allow a gathering system to operate at a lower pressure or provide sufficient discharge pressure to deliver natural gas into a higher pressure system,” Kheiry said. “Since wells produce at progressively lower field pressures as they deplete, field compression is needed to maintain throughput across the gathering system.” After natural gas has been processed at the Sherwood complex, the heavier and more valuable hydrocarbon components are separated out.

“Processing aids in allowing the residue gas remaining after extraction of NGLs to meet the quality specifications for long-haul pipeline transportation and commercial use,” Kheiry said. These “have been extracted as a mixed natural gas liquid (NGL) stream, (and) can be further separated into their component parts through the process of fractionation.”

Fractionation is defined as the separation of the mixture of extracted NGLs into individual components for end-use sale. This is done by controlling the temperature and pressure of the stream of mixed NGLs to use the different boiling points and vapor pressures of separate products.

One of the largest facilities in the Northeast, the MarkWest Sherwood Plant makes a significant financial impact in Doddridge County. “We are proud to be part of Doddridge County and to contribute to its economic foundation,” Kheiry said.

County Commission President Greg Robinson, said the tax impact has made a major difference. “The plant itself provides real estate taxes, but there’s also numerous pipelines that feed that plant,” Robinson said. “And those are all part of the tax.”

This, along with their employment of those in the county and the commuters who may stop to use Doddridge County gas stations, restaurants, and other amenities, all contribute back to the economy.

“It provides in many different ways,” Robinson said. “When a facility provides employment in addition to the tax base, that helps the community and helps the people — it’s how some residents earn their income.”

He added that the Sherwood Plant has been “extremely good” for the county because of their “willingness to be good neighbors.” “They’ve contributed to many different good causes. If there’s some big event going on, most of the time we can count on them to be a willing partner,” Robinson said. “We appreciate the willingness of the plant to help — to be good neighbors, and for their willingness to contribute.”

The county’s tax base has grown substantially in recent years, primarily because of the oil and gas industry, he said. “In addition, the oil and gas provides through the royalties. Many residents get a significant amount of income every year.”

Because of this increased tax revenue, they’ve been able to tackle a variety of projects that may have otherwise taken much longer. This includes construction of a new county library; taking care of a variety of infrastructure needs, such as streets and sewage projects; increasing their rainy day fund; contributing to the medical facility; and beginning the process of extending water to various parts of the county where it wasn’t previously available.

This past year, they were able to take on an exterior renovation project for the Doddridge County Courthouse, which cost around $2.5 million. “We’ve set aside money to start a new annex for the courthouse,” Robinson said. “Before we can do anything to the inside, we’ve got to move some people out, and we have no place to put them. It’s a logistical thing.”

The Board of Education has also benefited from Sherwood’s presence, Superintendent Adam Cheeseman said. “The revenue generated for our schools has been a big asset,” he said. With these funds, they’ve been able to offer development opportunities for teachers, supplement instructional activities and programs, and focus on larger one-time expenditures.

“The latest was the school entrance at the elementary school and the auxiliary gym for the high school, and we’re in the middle of a large project — a new football filed. baseball field, and athletic complex, with a new BOE complex,” Cheeseman said. “Sherwood, and oil and gas overall, have put us in a very good place.”

While these funds are exciting, “more exciting is that we’re hoping to further our partnership with MarkWest,” Cheeseman said. Already partners in education, he plans to connect the facilities with their school system, with hopes of providing opportunities ranging from internships to observation hours to trainings for students at Doddridge County High School.

Dominion @ Natrium

Dominion Planning for Startup of New Separation Plant at Natrium WV

By Casey Junkins, Staff Writer for the Wheeling Intelligencer, October 25, 2012.

NATRIUM – More than 900 construction workers are now building the $500 million Dominion plant with plans to have it ready to process 200 million cubic feet of wet gas per day by December.

“Currently we have 903 workers working in earnest on our Natrium construction project. Of the 903, 299 are local workers. In terms of completion, we are still working toward our December in-service date,” said Dominion spokesman Charles Penn.

As the plant remains under construction along the Ohio River and W.Va. 2 in Marshall County, members of the Affiliated Construction Trades Foundation remain at odds with Dominion – as well as the company building the plant on Dominion’s behalf, Chicago Bridge & Iron – for not hiring more local workers to build the facility. However, Penn emphasizes that CB&I has hired about one-third of its work force for the site from the local area.

Dominion will also look to hire 40-45 full-time, permanent workers for jobs at the plant itself upon completion. Penn said these jobs will pay from $20-$30 per hour. He said those looking for a career working at a natural gas plant will need different skills depending upon their specific positions. Some workers will need electrical experience in an industrial setting, while others will need experience in process operation control that they may have from working in gas, paper, water or chemical plants. There will also be positions for rail and tanker truck loading.

Once the wet Marcellus and Utica shale gas travels to the Dominion plant via the company’s pipeline network, the ethane, butane, propane and other natural gas liquids will be separated from the “dry” methane gas so that all the products can be individually marketed. See also here.

The Natrium plant is about to come on line at the time when Dominion is going to close a nuclear power plant in Wisconsin. “This decision was based purely on economics. Dominion was not able to move forward with our plan to grow our nuclear fleet in the Midwest to take advantage of economies of scale,” Dominion Chief Executive Officer Thomas F. Ferrell II said.

Caiman Energy was recently slapped with a $224,000 fine.  The offending incident occurred last year, when a subcontractor of theirs improperly constructed a stream crossing involved with pipeline construction.  ”A sludge blanket” was the result of the stream pollution.

Despite this, a spokeswoman of Caiman said that the company, “believes in respect for people and the environment.”  So hopefully Caiman will do a better job at choosing its subcontractors for its planned investments in processing infrastructure.

In Marshall County, Caiman Energy currently has the capacity to process 200 million cubic feet of natural gas per day.  The company plans to increase that to 920 million cubic feet of gas per day by the end of 2013.  This would involve improving their Fort Beeler cryogenic plant, as well as building a new plant. In addition to this, they’re planning a fractionation facility along the Ohio River which will be able to separate 42,000 barrels of ethane daily by October 2012.  Until a cracker plant is built in Appalachia, the ethane will be put in a pipline to Canada.

Read the full article in the Wheeling Intelligencer…

With the completion of archaeological digging, Dominion Transmission is ready to move forward with its planned natural gas processing facility on land next to the PPG Industries plant at Natrium in Marshall County some nine miles north of New Martinsville on the Ohio River.  ”This will be built on the ground where the archaeological dig took place. This is property Dominion now owns,” spokesman Dan Donovan said.

The Dominion plant – which is expected to be in service by December 2012 – should employ 40-50 full-time workers once complete, in addition to the many construction jobs. Chesapeake Energy, currently the Upper Ohio Valley’s most active natural gas driller, has agreed to supply the Dominion facility with 100 million cubic feet of natural gas per day for processing. Phase one of the project calls for processing 200 million cubic feet per day, and Chesapeake also has the option to provide the additional gas.

The facility will connect to an existing Dominion TL-404 pipeline in Ohio and West Virginia that was recently converted to handle “wet” gas, which is rich in natural gas liquids in addition to the “dry” methane natural gas. The plant is expected to be able to fractionate – or separate the gas from the ethane, propane and butane liquids – about 36,000 barrels of the natural gas liquids daily. Then the focus will be to expand the facility to process a total of 400 million cubic feet of natural gas per day and fractionate 59,000 barrels of natural gas liquids per day.

The Dominion facility should not be confused with local officials’ plans to attract another plant called an ethane cracker, possibly to property near the Bayer site south of the planned facility. At a cracker plant, ethane would be further processed into ethylene to make plastics (polyethylene) and other chemicals.

Sen. Brooks McCabe (D-Kanawha), lead sponsor of SB 465

The Marcellus Gas and Manufacturing Development Act was passed out of the the Senate Energy, Industry and Mining Committee on Feb. 17th.   The purpose of the Act contained in Senate Bill 465 is to encourage and facilitate “the development of oil and gas wells and the downstream uses of natural gas in this state and the economic development in this state associated with the production and various downstream uses.”   It intends to do that by using tax credits and incentives for industrial expansion (particularly for fractionation and ethane cracker plants) and promoting natural gas as an alternative energy fuel.  It also encourages the West Virginia Economic Development Authority, that agency that oversees TIFs, and the WV Infrastructure and Jobs Development Council to provide public assistance to this private industry sector, Marcellus shale gas, and it’s correlative industries fractionation and ethane cracking.

The bill contains tax breaks geared toward subsidizing both the planned Dominion fractionation plant and an anticipated, but as yet unannounced, cracker plant.  (See  Special Report: Task Force Charged with Opening Door to Chemical Industry in Kanawha Valley, FrackCheck Feb. 18.) The  bill also lowers the bar for the amount of investment qualifying for special privileges to certain manufacturing businesses to enjoy a 95% break on county property taxes.  So if a cracker plant costs $10 million, the owner or ownership entity pays county property taxes on an adjusted appraised value of only $500,000.  There’s a little whip-snapper provision that adds a small penalty if the investment occurs after July 1,2011; the cost of the real estate acquired for expansion is deducted from the basis for computing the credit.

The bill also adds fractionation and cracker plant investments to the list of industrial expansions which qualify for the Manufacturing Tax Credit (up to 5% of the cost of new manufacturing property).

Currently WV Code 11-13A-5a calls for 10% of oil and gas severance fees to be distributed back to the counties, with the majority directed to the counties in which the fees were generated. The bill amends that to allow for distribution of the severance fee to fund permitting and inspection of gas wells as well as highway funds.  Of the excess above the 10% of severance fees that is redirected back to counties, a $2 million Marcellus Shale Permit Fund is established to fund the WVDEP in permitting and inspection of gas wells.  A baseline of $64.8 million must be distributed from severance fees to counties and municipalities for highway maintenance under this bill.

Incentives for investing in natural gas powered vehicles and other alternative fuel powered vehicles (but not ethanol) and investing in the equipment to fuel those vehicles are also included in the bill.

The sponsors are Senators McCabe, Kessler (Acting President), Browning, Unger, Snyder, Stollings, Plymale, Wells, Palumbo, Beach, Klempa, Yost and Foster.  The bill goes to the Finance Committee next.  Story of bill’s introduction , Feb. 9.   Story of bills passage

Text of the Marcellus Gas and Manufacturing Development Act.

Further light reading:

ARTICLE 6F. SPECIAL METHOD FOR APPRAISING QUALIFIED CAPITAL ADDITIONS TO MANUFACTURING FACILITIES

ARTICLE 13S. MANUFACTURING INVESTMENT TAX CREDIT

ARTICLE 13R. STRATEGIC RESEARCH AND DEVELOPMENT TAX CREDIT

§11-13A-5a. Dedication of ten percent of oil and gas severance tax for benefit of counties and municipalities (must scroll down)