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Sunday, May 20, 2012

Pipeline Easements Needed For Energy Companies With Big Ohio Plans

From the Canton Repository:
Hundreds of miles of pipelines crisscross Ohio moving natural gas and oil, and those pipeline systems will increase now that companies are drilling Ohio’s Utica shale.
Building pipelines — just like drilling wells — requires companies to secure permission from landowners to use their property. Several companies have been talking to property owners about pipeline construction for at least a year.
As with drilling, Chesapeake Energy is one of the major players working to secure permission to build pipelines. Other companies plotting routes for pipelines are EnerVest, Dominion East Ohio and MarkWest Energy.
EXISTING PIPELINES
Even though miles of existing pipelines are connected to thousands of oil and gas wells that already dot the state, new lines will be needed for Utica wells. Companies expect large volumes of oil and gas to flow at high pressure from the shale formation that is 6,500 feet below the surface. New lines are needed to accommodate those volumes and pressures.
“The existing infrastructure is definitely outdated,” said Steven M. Downey, a vice president of business development and marketing with EnerVest.
Keith Fuller, Chesapeake’s Ohio director for corporate development, said the company has considered existing pipelines, “but most of the existing gathering systems do not have adequate capacity for typical Utica shale production rates.”
Pipelines will be carrying natural gas — dry methane and liquids — away from wells. Oil generally is stored in tanks near the wells and moved away in trucks.
AGREEMENTS
Some pipeline projects already have started in Carroll County, where Chesapeake has some of the first producing Utica wells.
But companies still need to secure easements and rights-of-way across property.
Bill Williams, a lawyer with Krugliak, Wilkins, Griffiths & Dougherty, said the firm represents more than two dozen landowners trying to reach agreements on pipeline projects.
Because of the Utica development, companies are offering $15 per foot — generally $6,500 per acre — to secure a right of way. That’s a far cry from the $1 per foot that had been paid not so long ago.
Some property owners have managed to negotiate a better price, Williams said. That happened when neighbors worked together and stood firm on a price and deal, he said.
Read the rest of the article here.

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