Utica Fueling Construction Industry In Eastern Ohio
It’s not every day Ohio is featured in the New York Times but that’s exactly what happened yesterday as the Grey Lady focused on the remarkable investment and jobs that Utica Shale/Point Pleasant development has provided the state. In the past two years, Ohio has seen 255 Utica wells costing upwards of around $11 million per well, processing plants projects being developed and construction projects putting Ohioans back to work. In short, the Utica Shale is the economic game changer we all hoped it would be.
Chesapeake is constructing three new buildings to house their Ohio office in Louisville, near Canton. They are planning a five-story, 85,000-square-foot office tower that is on schedule to be completed this year. The company is also building a 55,000-square-foot receiving and maintenance shop as well as 6,000-square-foot repair shop. All three of these buildings are estimated to bring $22-24 million in investment into Louisville as estimated by Louisville City Manager Thomas Ault.
These buildings are being constructed here in Ohio and creating new projects for Ohio construction companies. The investment isn’t going unnoticed by Louisville administrators.
“We haven’t had any private development around here to compare to this in a long time,”–Thomas Ault, Louisville City Manager (Ohio’s Resurgent Natural Gas Industry Spends Millions to Set Up Shop, 3/12/13)
While this investment is extremely significant, it pales in comparison to some of the midstream investments happening throughout eastern Ohio. Currently there are four natural gas processing companies planning projects ranging from $300 million to over a billion dollar investments into local communities. Investments like these have not been seen in this area of the state during my lifetime.
The M3 Momentum’s Utica East Buckeye project will consist of 3 processing plants, 2 cryogenic plants and one fractionation plants, and 200 miles of pipelines connecting all three. The project is estimated to cost $900 million and will employ a couple hundred construction jobs per project in addition to teams laying the pipeline.
MarkWest Energy Partner’s is constructing a $500 million project in Cadiz as well as a second processing plant in Noble County this year. Each plant will require 200 construction workers to build these facilities. According to MarkWest, 90% of these workers are from Ohio. Once completed the facilities could house 40 to 95 permanent employees.
In Mahoning County, two projects are being planned. The Blue Racer project, a $1.5 billion joint venture by Caiman Energy and Dominion, is hoping to build three processing plants throughout the region with one in Mahoning County. The processing plant in Mahoning County will be capable of handling at least 200 million cubic feet of gas per day. Nisource and Hilcorp Energy Company are also planning a $300 million processing in Mahoning County this year along with gathering lines from Columbiana to Northwestern Pennsylvania. Both of these projects will provide significant revenue and employment to the region.
“The Utica shale has enormous potential to provide jobs and revenues for the local Ohio economy”– Thomas F. Farrell II, Dominion’s chairman, president and chief executive officer
But building the processing plants and office buildings aren’t the only jobs having a significant impact on construction companies. Construction companies are also an integral part of developing a well. From pad development to road construction, construction companies are staying busy.
According to Amy Rutledge at a recent Utica Shale event in Boardman, Ohio, Chesapeake has spent over $40 million in road improvements in just one year. This investment in the community is amazing when you consider that before Chesapeake came to town the county only had $500,000 a year budgeted for road improvement.
Kelchner Energy Services, a company out of Dayton, is very busy working on pad construction and other projects for companies in the Utica. In any given month they average 20 projects. Some are small and only take a couple of days while the larger project could last 3 months. These projects have helped Kelchner Construction dedicate 60-75 employees just to Utica projects.
When people think about shale development in Ohio, they tend to think only about the people on the rigs, but it is so much more than that one portion. Utica/Point Pleasant development is helping reinvigorate Ohio’s construction sector and we are only at the very infancy of development.
New projects will continue to be announced and service companies like Halliburton, who is building a 135,000 square foot facility in Zanesville, will continue to build operations to service companies developing the Utica. These are opportunities that sometimes go unnoticed when discussing the far reaching positive impact Utica/Point Pleasant development is having on our state.