Partner with Electrical Utilities Early for Best Location, Lowest Costs
The role electric utilities can play in shale development operations is under-valued. Utilities can be a valuable partner in helping keep project costs low, even influencing location decision for pipelines and processors.
For maximum benefit to all partners, utility companies aim to forge relationships early for natural gas projects. Many will provide free GIS mapping, estimates on cost and timing of the extension of services and support the project in many other ways as well. A great example of this is the billion-dollar Utica East Ohio Midstream Buckeye (UEO Buckeye) project, the first fully integrated gathering, processing and fractionation complex to be put into operation in Eastern Ohio.
The UEO Buckeye system is a joint venture of Access Midstream, M3 Midstream and EV Energy Partners. The project will create processing infrastructure for natural gas and natural gas liquids to get the Utica Shale product of Chesapeake and a few other operators to market.
The complex project includes three facilities: the Kensington processing facility in southern Columbiana County; the Leesville processing facility in southwestern Carroll County; and a third facility, the Harrison Hub, near Scio, in Harrison County.
The three facilities were ideally suited for this project and are connected by 63 miles of natural-gas-gathering and natural-gas-liquids-gathering pipelines that will connect with larger interstate pipelines.
However, there was one problem: the Leesville location was in the service territory of Carroll Electric Cooperative, a short distance from AEP’s service territory. Having worked with AEP previously, the partnership valued an AEP served location. With the agreement of all parties involved, AEP, the project partners and the co-op worked collaboratively to adjust AEP’s service area by approximately 95 acres to include and provide service to the Leesville facility.
The resulting UEO Buckeye Kensington Processing Plant fills an important infrastructure gap in the Utica Shale region and the economic development efforts are benefiting a three-county area with much-needed jobs and local community support.
How can the AEP team help you with partnerships, locations or projects?