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Shale Activities Could Replace Former Ohio Steel Plant Site

A former steel plant in Steubenville, OH, is being redeveloped into an industrial park, a portion of which state and local officials say will be used to support operations in the Marcellus Shale.

River Rail Development LLC, a subsidiary of Strauss Industries Inc., is redeveloping the brownfield site of RG Steel LLC's former Steubenville Plant at a cost of $15 million. It is 130 acres with access to two rail lines and barge access to the Ohio River.

Last month, River Rail's plans for the site received a big boost from the state, after the Ohio Office of Budget and Management Controlling Board approved allocating $1 million from the Clean Ohio Assistance Fund (COAF) to demolish two blast furnaces, a boiler house and an annealing building at the former steel plant. The funds will also pay for asbestos abatement costs.

According to state Rep. Jack Cera (D-Bellaire), the redevelopment of the former plant into an industrial park will create 50 jobs. Cera said the industrial park "will support the needs of metal recycling and shale gas operations."

"Working together on this project, the city, county and state are assisting River Rail in its efforts to put eastern Ohioans back to work," Cera said. "I applaud the progress in making this site suitable for the $15 million investment by River Rail."

In its COAF application from January, River Rail said it was completing asbestos abatement, soil remediation and demolition activities on the former plant site, but outside of the 3.31-acre COAF study area, using private funding sources.

"After remediation the subject property will be redeveloped with a multimodal transfer and processing facility to support midstream shale gas operations. The facility should be under construction in summer 2013 and operational by 4Q2014."

River Rail added that the site "consists of multiple buildings and structures used for various operations associated with steel manufacturing. With the exception of a few small offices historically and currently used for office space, the industrial buildings and structures, which are in deteriorating condition, are scheduled to be demolished and the site redeveloped with new buildings and infrastructure."

The company did not identify any oil and natural gas companies as potential tenants at the new industrial park, or clarify what it meant by "multimodal transfer and processing facility." But River Rail did say the new industrial park would have "new buildings and infrastructure for metal scrap processing as well as industrial activities in support of the region's shale gas development."

Christopher Petrossi, urban projects director for the city of Steubenville, told NGI's Shale Daily that two oil and natural gas companies have been in negotiations with River Rail for months over the site. He could not disclose the names of the companies, but did say one was a major based in Houston.

"They both want different types of facilities there, and in different areas," Petrossi said Monday. "They're not competing against one another. They have both visited the site on numerous occasions and have had consultants doing their analysis, etc. It's a very large site. Although River Rail needs it for their own purposes, there would be quite a large area of additional land available for other users."

RG Steel, its affiliates and subsidiaries filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the District of Delaware on May 31.

River Rail purchased the former plant from RG Steel for $4.3 million last July, intending to develop the site into an industrial park for Strauss to conduct scrap metal processing and logistic activities, and for other industrial uses. The site has been used to make steel since 1856, first for the Jefferson Iron Works.

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