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The signs of pipeline development and shale are growing in western Pennsylvania as Hilcorp Energy Co. works to add miles of line to connect its two drilling operations in Pulaski Township.
The first well has been fracked, while work is under way on a second off North Valley View Road, said Lori Sniezek, secretary/treasurer for the township. The rig was removed from the initial site on Pa. Route 551.
“There have been two wells constructed in the county, and they’re starting to work on the pipeline,” she said.
The initial well site in the township started work in the early summer and finished in the last couple of weeks, Sniezek said. Hilcorp is working closely with landowners and the community regarding infrastructure development near Pulaski, said Justin Furnace, corporate manager of external affairs.
“It is hard to say how long these particular projects will last at this point. We are just now drilling and completing our first wells in the area,” he said.
The two companies with the majority of oil and gas holdings in Lawrence County are Hilcorp and Shell, said Linda D. Nitch, executive director of the Lawrence County Economic Development Corp.
“The companies are both moving around the county trying to determine the sweet spots. I don’t know if they’ve identified the sweet spots yet,” she said. “We’re hearing reports that they’re finding natural gas liquids, which are much more valuable.”
Natural-gas liquids are heavier products like propane, which currently sell for much higher prices than dry natural gas, such as the gas used to heat homes.
There are also a number of new companies to serve the industry starting to make their way into Lawrence County, Nitch said.
Leasing activity in the county has slowed, she said. “We’re not seeing nearly the same number of deals that we were seeing late last year and early this year,” Nitch said.
There also isn’t muchpipeline activity being announced throughout the county. The deals being made are being done quietly, she said. Companies seem to be staying in an exploratory phase at this point.
On Lawrence County’s northern border, Mercer County has also begun to see its share of development with more than 500 oil- and gas-lease agreements reached in September and nearly the same number in October within the county.
These companies are putting together leases and signing them in bunches, said Gary Dovey, vice president of business development for Penn-Northwest Development Corp. in Mercer County.
Development has slowed in the eastern portion of Mercer County, while it continues to progress near the border with Ohio, he said.
“I think the reason for that is that companies can’t make any money from natural gas,” Dovey said.
Companies now are going much more for oil and natural-gas liquids, he said. At this point the St. Mary’s Storage Field in the county is full for the first time in its history.
“For natural gas you have to rely on the market, but for natural-gas liquids all you have to rely on is signing a contract with one company to purchase your product. It’s a lot easier,” Dovey said. “Technology is also making it easier for companies to find the sweet spots where they’ll find natural-gas liquids.”
The area is still three to five years from taking full advantage with the expected influx of companies moving to the area that use natural-gas liquids, he said. This includes potential petrochemical companies that may or may not move to the area.
One of the advantages that Mercer County has is the Tennessee Gas pipelines, which are a major transition system to the East Coast, Dovey said.
Tennessee has been updating its lines preparing for an influx of gas, he said.