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Hans Rottmann comments on Utica Shale processing plant

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This morning, the Pittsburgh Business Times published an article about a natural gas processing plant for the Utica Shale that is up and running. I want to quickly comment on its impact to the region.

All signs continue to point toward prolific growth of shale gas production in the Northeast. It’s almost impossible not to find an article related to shale gas in the local newspapers in Pittsburgh, PA. As you may have seen, there are many articles about shale including growing production and in turn, job growth, as well as environmental concerns.

Recent data has shown that production from the Marcellus Shale is up more than 50% in Pennsylvania and West Virginia over the last year. There have been concerns that the long-term decline of natural gas prices will stem drilling efforts. But instead the industry has reacted tactically by focusing on certain opportunities that may have additional value from oil or natural gas liquids to supplement economic returns. And increasing drilling efficiency has reduced break-even costs.

So, the end result has been strong production growth. And it is more than the Marcellus Play. The Utica Shale Play is another layering of natural gas and oil that is being tapped into. This map shows that much of the Utica is directly underneath the Marcellus. Today’s Pittsburgh Business Times article is more evidence that Utica shale suppliers are now reaching the market. One challenge that shale drillers have had is the lack of infrastructure – both pipelines and gas processing plants – to extract valuable NGLs and to connect wells to the pipeline grid. The fact that there is now a gas processing plant focused on the Utica Shale is another small step in delivering this gas to market. Keep watching the news because more is coming.

Posted: August 27, 2013