The proximity to the Utica and Marcellus shales is attracting an international company to spend $13.2 million for a natural-gas compression facility on Salt Springs Road.
Exterran Energy Solutions plans to start construction in February on the 65,000-square-foot manufacturing facility and office building to be operational in about a year with the work finishing in July 2015, according to paperwork provided by the company to the city.
When the project is complete, “[it] is one that will have a huge impact on the local economy with potential for further growth,” said T. Sharon Woodberry, the city’s economic development director.
The company plans to spend $9.3 million on building construction and $3.9 million on machinery and equipment at the city’s Salt Springs Business Park.
“This company is one of the leaders in the market for compression, fabrication and service to the oil and gas industry,” Woodberry said. “They’re coming for the Marcellus and Utica shale boom.”
Susan Moore, Exterran’s spokeswoman, declined to comment Monday to The Vindicator, saying the company’s paperwork speaks for itself.
On the application for a tax abatement from the city, Exterran officials wrote that the project was to “serve customers in the Marcellus and Utica shale. ...”
Exterran is based in Houston but has locations throughout the United States and in 24 other countries.
The company provides a variety of above-ground services for fracking.
That work includes processing, compression, water treatment, equipment, products and services, according to its website.
Fracking is a process where water and chemicals are blasted into rocks thousands of feet below the ground to unlock natural gas and oil.
The extraction of gas and oil from the Marcellus and Utica shales has brought numerous companies to the Mahoning Valley.
Exterran plans to hire 13 employees by July 2012, then 20 more in October 2012, an additional 20 in January 2013, 20 more in July 2014, and then 30 in July 2015.
The city administration is asking city council to approve legislation Wednesday to give a 20-acre site on Salt Springs Road to the company at no cost as well as a 75 percent, 10-year real-property-tax abatement.
The abatement calls for Exterran to pay $590,000 and save $1.79 million in real-property taxes over 10 years.
When the facility is fully operational, its employees would pay $135,506 in annual income tax to the city, which has a 2.75 percent income tax, Exterran paperwork states.
The city received about $4 million from the state’s Job Ready Sites program in 2009 for this property.
The city purchased the land for $1.4 million that year from LaFarge North America Inc., which used the property for several years to mine slag.
The city spent about $2.1 million last year to have a company build a road and install utility lines at the location.
Exal Corp., which makes aluminum cans and bottles at the city’s Performance Place Business Park on Poland Avenue, has considered a $400 million expansion project at that location since 2007.
“We haven’t given up on Exal, but with no firm time line [by that company], we had to move forward with this [Exterran] project,” Woodberry said.