Midstream Projects Will Ramp Up in Ohio as More Wells Produce

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From the Akron Beacon Journal:
Ron's Workingman's Store had been a small, durable business here for nearly 75 years, serving eastern Ohio's industrial workers. And then Chesapeake Energy Corp. moved in across the street last year, as the Oklahoma firm made its foray into the Utica Shale gas development.
"We created a great friendship, and a lot of their subcontractors came over here," said the store's purchasing manager, Lisa Nicodemo. Sales of fire-retardant clothing used in drilling operations spiked, along with business at the company's companion store, Wilkof Industrial Supply, handling industrial equipment and tools.
"Two years ago, we were running this place with four people. Now we're up to nine," said Nicodemo, whose company has added a mobile store that goes to drilling sites. "This is just the beginning."
Indeed, tapping into the Utica Shale resource is just beginning. Oil and gas companies have secured 405 permits, nearly all of them since the beginning of last year, and have drilled 171 exploratory wells. The U.S. Geological Survey, in its first estimate of the Utica Shale this month, pronounced it a potential gold mine, with 38 trillion cubic feet of technically recoverable natural gas, 940 million barrels of oil and 208 million barrels of natural gas liquids.
But moving the Utica's production -- in particular, the valuable natural gas liquids -- into markets has hit a bottleneck with gas prices stubbornly low. In June, 24 horizontal wells were drilled. In September, the number had dropped to three.
"These companies are very anxious to get going," said Tom Stewart, executive vice president of the Ohio Oil and Gas Association. "But the lack of adequate midstream capacity is a throttle on drilling activity," he added, citing the lack of infrastructure, notably the processing facilities required to separate ethane and other gas liquids from pipeline gas, so that both can be sold.
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