LEETONIA - Consol Energy Inc. is establishing a presence at the Columbiana County Port Authority's industrial park here as the energy giant prepares to increase its involvement in Ohio's shale gas boom.
The port authority on Thursday agreed to begin leasing 10,000 square feet of office space at the industrial park - officially named the Leetonia World Trade Park - to the CNX Gas Co., Consol Energy's gas division.
The lease is for one year but the parties can extend the lease annually for up to an additional four years, with the port authority to be paid $160,000 annually in rent initially and built-in increases after that. The bigger payoff is expected to occur for the area as CNX expands its shale gas drilling in the region.
Harry Schurr III, general manager of Utica shale operations for Consol Energy, talked with reporters Thursday as Miranda Kessell, of Consol listened. (Photo by Patti Schaeffer)
"It's a field-based office. It will handle everything that has do with our Utica (shale) program in Ohio, from land permitting, the drilling support component and production people to support all of those activities .... All of the staff will work out of the office," said Harry Schurr III, general manager of Utica shale operations for CNX.
"Everything, from the time we lease and permit a well, to the time we turn into line, will come out of this office," he said.
CNX expects to move in sometime in May with an initial staff of five to seven workers, growing to 20 within the first year. "And then it will grow exponentially based on the success in the area and where we find good hydrocarbons," Schurr said.
While Consol is the largest domestic producer of underground-mined coal, the company is also the leading natural gas producer in the eastern United States. Consol has the mineral rights to 200,000 acres in Ohio and last December sold half of its shale development rights in the state to Hess Corp. for $593 million.
Hess, an oil and gas exploration and production company, is to have operational control of 80,000 acres in Jefferson, Harrison, Guernsey and Belmont counties. Consol would retain control over the remaining 120,000 acres, which includes Mahoning, Tuscarawas, Portage and Noble counties.
Consol spokeswoman Miranda Kessell said the port authority industrial park was the perfect location as they prepare to expand their drilling operations in Ohio. "As far as logistics go, this is central to our operations throughout Ohio. This was the perfect place between our headquarters south of Pittsburgh and all of our activity here in Ohio," she said.
Schurr agreed, saying, "We were looking for something central to the acreage and easily accessible ... and a place where people would want to move and live in the area, and we think Salem and Leetonia will be that area."
Consol drilled its first shale well in Tuscarawas County and is preparing to drill another in Noble County, "and we'll be following up with additional wells in Mahoning, Portage, Trumbull. Those are our main target areas right now," Schurr said.
Consol has some land under lease in Columbiana County, but not enough for the company to focus on at the moment, which is why its drilling efforts will directed elsewhere, he said.
Port Authority CEO Tracy Drake said the Consol deal should answer once and for all any questions about whether the county is at the center of the shale gas boom in the region.
"This says something that one of the largest energy companies in the country - equally as big a group as Chesapeake - says were putting our western headquarters here," Drake said.