Genesee & Wyoming Inc. (GWI) announced Monday that one of its railroad subsidiaries has signed a long-term agreement to transport natural gas liquids (NGL) and serve a fractionation facility being built by Utica East Ohio Midstream LLC (UEO) in Harrison County, OH.
The Columbus & Ohio River Rail Road Co. (CUOH) will build a one-mile rail siding and rehabilitate a three-mile storage track to serve the Harrison Hub in Scio, OH, which is scheduled to come online in May 2013. CUOH expects to ship 10,000 carloads of NGL annually. The railroad did not disclose how many years the agreement was for.
The Harrison Hub is to have an initial NGL storage capacity of 870,000 bbl, fractionation capacity of 90,000 b/d, and the rail-loading facility.
UEO is a joint venture (JV) of M3 Ohio Gathering (Momentum), Chesapeake Energy Corp. affiliate Chesapeake Midstream Development LP (CMD) and EV Energy Partners LP (EVEP). The JV plans to invest about $900 million over the next five years developing the largest integrated midstream service complex in eastern Ohio.
The project includes the Kensington Plant in Columbiana County, a cryogenic processing facility with an initial capacity of 600 MMcf/d and an expected full capacity of 800 MMcf/d.
“We are excited to be expanding our service relationship with [UEO] and to be investing in rail infrastructure to support their business,” said John Murray, assistant vice president of sales and marketing for GWI’s Ohio Region. “Efficient rail service is a key requirement of shale development, and we are committed to providing our customers with the necessary rail services to meet their long-term transportation needs in the Utica and Marcellus markets.”
Greenwich, CT-based GWI said UEO will become its largest customer in the Utica. The company added that other projects in the emerging Utica Shale will benefit from a $2 million expansion of CUOH’s main rail yard in Newark, OH, a project funded in part by the State of Ohio. The expanded rail yard will sort 100,000 railcars annually for more than 80 current customers, plus the Utica Shale additions.
Last March CMD said it would partner with Momentum and EVEP to develop the project (see Shale Daily, March 16). Total E&P USA Inc., Chesapeake’s 25% JV partner in wet gas Utica Shale acreage, was also given an option to participate in the project.
In October a subsidiary of Dominion Resources Inc. — Dominion East Ohio — signed a long-term natural gas gathering service agreement in northeastern Ohio with Momentum to process wet gas in the Utica (see Shale Daily, Oct. 29). Dominion agreed to supply the Kensington Plant with 180 MMcf/d, beginning in early 2014.
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