The Utica shale formation is larger than the Marcellus shale and runs beneath the Marcellus for the most part. It runs from the Canadian province of Quebec in the north to as far south as Tennessee, but commercial interests in the Utica are currently focused in eastern Ohio.
Estimates of natural gas deposits in the Utica shale formation range from a low of about 2 trillion cubic feet (tcf) to a high of 60 to 70 tcf. Companies have been drilling into the Utica on the Canadian side of the border for years, but recent exploratory wells in the eastern part of Ohio near the Pennsylvania border have showed commercial potential.
Crosstex activates Black Run rail terminal
Crosstex Energy LP has re-activated its Black Run rail loading terminal located in Frazeysburg, Ohio, on the Ohio Central Railroad (OHCR) allowing the export of Utica Shale light oil condensate production. The Black Run facility is a state-of-the-art 20-car rail rack with tracking gangways designed to top load multiple products, including light oil condensate and various grades of crude oil, at a rate of 24,000 barrels per day. The Black Run rail terminal is the first facility to move light oil condensate out of the region to premium-priced refinery and petrochemical markets.
"The re-activation of our Black Run rail facility enables us to offer producer customers in the Utica Shale an immediate midstream solution to export their products to out-of-region markets to maximize value for our customers. We are pleased to be at the forefront of moving product by rail in an area where there is a lack of transloading capabilities," said Barry E. Davis, Crosstex president and CEO. "Our Ohio River Valley assets continue to provide Crosstex with an exceptional growth opportunity as more wells come on line in the Utica Shale."
The OHCR is a 70-mile short line freight railroad that interchanges with the Columbus and Ohio River Railroad, CSX Transportation, Norfolk Southern, Ohio Southern Railroad and Wheeling and Lake Erie Railway. The Black Run terminal, which is adjacent to the Partnership's oil gathering pipeline, will leverage the Partnership's existing tankage and piping, as well as the capabilities of its extensive truck fleet in the Ohio River Valley.
Williams board approved Bluegrass Pipeline project
Williams and Boardwalk Pipeline Partners LP on May 28 announced they had formalized key joint-venture agreements tied to the proposed Bluegrass Pipeline and related fractionation, storage and export projects.
Phase 1 of the project will provide producers with 200,000 barrels per day of mixed NGL take-away capacity in Ohio, West Virginia, and Pennsylvania. Phase 2 will increase capacity to 400,000 barrels per day to meet market demand, primarily by adding additional liquids pumping capacity. The pipeline will deliver mixed NGLs from these producing areas to new fractionation and storage facilities, providing connectivity to petrochemical facilities and product pipelines along the coasts of Louisiana and Texas.
The Bluegrass Pipeline includes construction of a new NGL pipeline from producing areas in Ohio, West Virginia, and Pennsylvania to an interconnect with Boardwalk's Texas Gas Transmission LLC system in Hardinsburg, Kentucky. From that point to Eunice, Louisiana, a portion of Texas Gas would be converted from natural gas service to NGL service.
The joint venture also will include constructing a new large-scale fractionation plant and expanding NGL storage facilities in Louisiana and constructing a new pipeline connecting these facilities to the converted Texas Gas line in the Eunice, Louisiana area. Williams and Boardwalk also are exploring development of a new export liquefied petroleum gas terminal and related facilities on the Gulf Coast to provide customers access to international markets.
By combining new construction with an existing pipeline, Williams and Boardwalk believe that the Bluegrass Pipeline should be placed into service and begin serving customers sooner than other options. Williams and Boardwalk are engaged in comprehensive project development planning including permitting, public consultation, and right-of-way acquisition. Williams and Boardwalk expect that the planned project should be placed into service in late 2015.