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Rex Energy obtains air permit for Pennsylvania gas plant

Warren R. True
Chief Technology Editor-LNG/Gas Processing

HOUSTON, Aug. 18 -- Rex Energy Corp., State College, Pa., has received an air permit for its 40-MMcfd Sarsen cryogenic gas processing plant in Butler County from Pennsylvania’s Department of Environmental Protection.

The skid-mounted plant is to be relocated from Texas, Rex Energy told OGJ, and assembled by Keystone Midstream Services LLC, a joint venture Rex Energy formed in late 2009 with Stonehenge Energy Resources LP to construct and operate all midstream assets in Butler County. Keystone Midstream is investing up to $25 million to build gathering and processing in the county.

With this permit, according to Rex Energy’s announcement, Keystone Midstream has begun final work on the plant and expects to begin operating it in October. At that time, said Rex Energy, the plant will process 20 MMcfd because that is the current limit of compression at the site. By yearend, however, another 20 MMcfd of compression will have been installed to allow Keystone Midstream to run the Sarsen plant at capacity.

Marcellus action
Ownership of Keystone Midstream consists of 40% by Rex Energy and 60% by Stonehenge Energy. Rex Energy has had a small gathering system in place to serve five wells it had drilled by yearend 2009, one horizontal and four vertical.

It had also installed a 5-MMcfd refrigeration plant on site to demonstrate the flow the wells and prove their value to the company’s midstream partners, according to a Rex Energy spokesperson. Since the beginning of 2010, Rex has drilled four more horizontal wells.

Gas from the production carries a 1.8-gal/Mcf liquids content consisting of ethane, propane, and butanes. An ethane tower planned for the site will separate a stream to be injected, up to an 1,100-btu limit, into the product-gas stream to market.

Enbridge has contracted to take the remaining separated liquids to Chicago.

Contact Warren R. True at warrent@ogjonline.com.


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