Officials with Houston-based NiSource, on a trip to the Mahoning Valley on Tuesday, said the natural gas processing facility under construction in New Middletown will be operational by year’s end.
The company first announced the plant in December, after it partnered with exploration and production company Hilcorp Energy.
The flow of traffic on State Line Road, where the plant is being built, and the areas in and around New Middletown have been congested in recent weeks with trucks hauling rock to the location as site development nears completion.
The bulk of the facility’s construction will get underway June 1, said Chad Zamarin, chief operating officer of NiSource Midstream Services. At that point, Zamarin said congestion should ease.
In the meantime, the company has worked closely with local and state officials at the Ohio Department of Transportation to develop better ways to mitigate the flow of traffic.
Last June, Hilcorp aggressively began leasing acreage in Mahoning County, where it recently completed the drilling of its first Utica Shale well in Poland Township. More recently, Hilcorp has been busy grabbing leases in Mercer and Lawrence counties just over the state line in Pennsylvania.
Workers from Associated Pipe Line Contractors also recently completed a 12-inch pipeline that will gather gas from Hilcorp’s Poland well and tie it into Dominion East Ohio’s Tennessee pipeline for distribution in Northeast Ohio.
The 55 miles of pipeline that will gather oil and gas for processing at the NiSource facility in New Middletown will start being installed in mid-June, Zamarin said.
Hilcorp has dedicated all of its Utica acreage to the processing facility, which will help get it up and running while NiSource markets its services to other production companies operating in the area. The facility will process 200 million cubic feet of natural gas initially, with the capability to process 600 million cubic feet if the need arises, Zamarin said.
Already, early construction efforts have created more than 175 local jobs. Though the general contractor Chapman Corp. is based in Washington, Pa., it is sourcing local union labor for the project.
Once the processing facility, which helps ready oil and gas for industrial and commercial use, is operational, about 25 local employees will be hired and trained to support and run the facility, Zamarin said.
With the precipitous drop in natural gas prices that occurred last spring, combined with little infrastructure to help process and carry product to market, production has been slow during the last year.
Some experts believe that three years of infrastructure build-out and development will be required before the Utica truly begins to show its full potential.
The NiSource project is among one of the first processing facilities being built to serve the Utica, where it will process gas from operators in Eastern Ohio and Western Pennsylvania. If successful, NiSource will consider expanding its New Middletown facility, bumping the total investment from $300 million to nearly $1 billion, Zamarin said.
Columbia Gas of Ohio, a NiSource subsidiary, has one of the most extensive natural gas distribution networks east of the Mississippi River. NiSource chose New Middletown because it already has a significant infrastructure footprint in Northeast Ohio.