Five years and $700 million after Range Resources Corp. determined the Appalachian Basin, specifically Southwest Pennsylvania, could be the country's next natural gas production hot spot, "cool" processing of the fuel from local wells has begun.
Fort Worth, Texas-based Range has partnered with MarkWest Energy Partners LP of Denver to open a refrigerated processing plant in Chartiers, Washington County. Range is providing natural gas from some 30 drill sites located in the Marcellus Shale formation.
The plant can handle up to 30 million cubic feet per day of what's called "wet" natural gas. Wet gas includes a number of other gases that must be separated prior to shipping to homes through nearby interstate natural gas pipelines.
Both companies are trying to capitalize on what some natural gas industry experts believe could be the country's largest onshore natural gas field, Appalachia's Marcellus Shale formation.
Geologists have known about the Marcellus for years, but there never was an economical way to extract it commercially. Recent advances in drilling, specifically horizontal drilling, and well completion techniques being used in other shale areas, such as the highly successful Barnett Shale formation in Texas, allow explorers to crack the shale and extract what's believed to be huge potential.
"This plant enables us to really ramp up production," said Jeff Ventura, a Penn Hills native and Range's president and chief operating officer, Monday during a tour of the company's Marcellus Shale operation at the Southpointe office park in Cecil, Washington County.
MarkWest is spending $200 million to building this and two other plants off Route 519, three miles north of Houston to handle Range's production.
The plants will be dedicated to Range's natural gas production. Ventura said the company expects to be producing by the end of next year up to 100 million cubic feet of natural gas daily. One million cubic feet of natural gas is enough fuel to handle the needs of an average Pittsburgh-area home for more than 10 years.
"This plant makes the Marcellus Shale play real," said MarkWest CEO Frank Semple.
Range and MarkWest are among a number of local, regional and national companies probing the Marcellus formation. Marcellus Shale is a layer of shales typically 5,000 to 6,000 feet below the surface, running from the southern portion of New York, through much of Pennsylvania, into eastern Ohio and through most of West Virginia.
Estimates vary, but some surveys place recoverable natural gas from the entire Marcellus region in the 200 trillion cubic feet to 500 trillion cubic feet range, enough gas to handle all of America's natural gas needs for more than 10 years.
Range alone has control of 850,000 acres of land primarily in Pennsylvania.
In addition to processing Range Resources' natural gas, MarkWest looks forward to selling natural gas liquid products once the other facilities are completed. The company also is signing deals with other companies to offers its services elsewhere in Appalachia.
"Long-term, we're looking at processing 150,000 gallons per day of propane, and 50,000 to 60,000 gallons per day of other liquids, which we will move by truck, pipeline and eventually by rail," said Randy Nickerson, MarkWest's chief commercial officer.
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