Dominion to build natural gas processing, liquids fractionation plant in West Virginia
Dominion said Thursday that it is proceeding with its next major project in the Marcellus and Utica Shale regions, which is the construction of a large natural gas processing and fractionation plant along the Ohio River in Natrium, W.Va.
The first phase of construction includes facilities that can process 200 million cubic feet/day of natural gas and fractionate 36,000 bpd of natural gas liquids.
This phase of the project is more than 90% contracted and is expected to be in service by December 2012.
"We are working to secure additional producer commitments for a second phase of the project," said Thomas F. Farrell II, CEO of Dominion.
"Once those contracts are finalized, efforts to expand the Natrium facility to process a total of 400 million cubic feet of natural gas per day and fractionate 59,000 barrels of natural gas liquids per day will be underway."
The new facility is a response to the need for additional processing and fractionation capacity in the region, the company said.
The rising price of oil and the low price of natural gas have shifted drilling activity in the region from the dry gas to the wet gas areas as producers look to capture the economic value of natural gas liquids.
"The Natrium site is an ideal location," said Gary Sypolt, CEO of Dominion Energy. "We will have the capability to access production in both the Marcellus and Utica Shale regions, and ship products via barge, rail, truck and pipe, thus offering significant value to producers."
Dominion has exercised its option with PPG Industries to purchase land and locate the new plant adjacent to PPG's Natrium facility in Marshall County, about 9 miles north of New Martinsville, W.Va.
It will connect to Dominion Transmission's TL-404 pipeline, an existing pipeline in Ohio and West Virginia that was recently converted to handle wet gas.
"Natrium will be a world class facility," said Paul Ruppert, senior vice president of Dominion Transmission.
"It is being constructed to the latest industry standards to be an extremely reliable plant, which should be appealing to producers looking to capture the greatest value. Dominion has 100 years of experience in operating processing plants, has a proven track record and understands this business."
Wet gas from West Virginia and Ohio will be delivered to the TL-404 by Dominion Transmission, Dominion's interstate natural gas pipeline and storage subsidiary, and by Dominion East Ohio, Dominion's natural gas distribution subsidiary in Ohio.
"The emerging Utica Shale play will also have access to Natrium's services through the large diameter, high pressure pipelines of Dominion East Ohio that are already connected to TL-404," said Anne Bomar, senior vice president and general manager of Dominion East Ohio.
Besides bringing new development to the area, the site is expected to employ 40-50 people when fully completed. It will encourage local natural gas production by allowing producers to get their products, both liquids and dry gas, processed and separated for marketing.
The largest customer is Chesapeake Energy Marketing, a wholly-owned subsidiary of Chesapeake Energy, which has contracted for 100 million cubic feet per day and has an option for capacity on the second phase.
Dominion has retained CB&I to be the engineering, procurement and construction contractor for the first phase.
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