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Antero Investing $275M For West Virginia Oil/Gas Wastewater Treatment Plant

Appalachian pure-play Antero Resources Corp. said Wednesday it would invest $275 million to build a state-of-the-art 60,000 barrels/day wastewater treatment complex in Doddridge County, WV.

CEO Paul Rady claimed it would be the basin's largest oil and natural gas wastewater treatment plant. The company has signed a 10-year agreement with Veolia Water Technologies Inc. to design, build and operate the facility. The facility is scheduled to be operational by 2017, pending permit approval.

Veolia Water Technologies, a division of Paris-based Veolia Environment, offers onshore and offshore oil and gas water treatment services worldwide. Antero's facility would use Veolia's evaporation and crystallization technology to treat flowback and produced water for reuse in its operations rather than disposing of it in Class II underground injection wells. The facility would also produce commercial byproducts such as salt for sale to help generate revenue in addition to cutting costs for recycling and disposal.

CFO Glen Warren said the facility could ultimately save Antero $150,000/well in completion costs by reducing expenses for recycling and disposal.

"This significantly improves the safety and reduces the environmental impact of shale development by removing hundreds of thousands of water truckloads from the roads every year, and recycles and reuses the water rather than dispose of it," Rady said. "The solutions also provide Antero with a significant development cost advantage."

Disposal and recycling costs have been on the rise for onshore unconventional producers, and underground injection has also grown increasingly contentious (see Shale Daily, Aug. 14; March 16; March 9; Jan. 17, 2014).

Antero has more than 559,000 net acres in the Marcellus and Utica shales. The facility would be centrally located to serve both plays, and the company would own it, along with ancillary facilities constructed in the future. The producer already operates one of the basin's largest freshwater distribution pipeline systems. That water business and the treatment facility are expected to be dropped down to the company's midstream affiliate, Antero Midstream Partners LP.

Antero said its contract with Veolia provides performance guarantees such as uptime availability that would help make the plant more economical and reliable. Based on its current development plans, Antero said it expects the facility to be 50% utilized upon the in-service date, with plans for full utilization three years after. Those projections do not include possible third party volumes. 

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