Monday, December 03, 2012

GWI line signs pact to serve natgas liquids hub

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Genesee & Wyoming Inc. said Monday that its wholly owned subsidiary, the Columbus & Ohio River Rail Road Co. (CUOH), has signed a long-term agreement to serve the $900 million natural gas liquids (NGLs) fractionation hub being constructed in Scio, Ohio, by Utica East Ohio Midstream, LLC.

First announced in March 2012, the processing/fractionation/storage facility will be the largest integrated midstream service complex in eastern Ohio and GWI's largest customer to date in the Utica Shale area.

Greenwich, Conn.-based GWI said the plant's location was selected based on proximity to the Utica Shale's liquids-rich gas, to key natural gas pipelines and to the CUOH. The CUOH will construct a one-mile rail siding and rehabilitate a three-mile storage track to serve the facility, which when fully operational is expected to ship 10,000 carloads of NGLs annually.

Upon its planned opening next May, the Scio plant will also benefit from a recent $2 million expansion of CUOH's main rail yard in Newark, Ohio, funded by a public-private partnership between CUOH and the State of Ohio. The Newark Yard expansion will facilitate the sorting of 100,000 railcars per year for more than 80 current customers and will also serve several new, Utica Shale-related projects that have located or are planning to locate on the CUOH.

"We are excited to be expanding our service relationship with Utica East Ohio Midstream and to be investing in rail infrastructure to support their business," said John Murray, assistant vice president of sales and marketing for GWI's Ohio Region. "Efficient rail service is a key requirement of shale development, and we are committed to providing our customers with the necessary rail services to meet their long-term transportation needs in the Utica and Marcellus markets."

Matthew Dietrich, executive director of the Ohio Rail Development Commission, highlighted the public-private advantage of the project, saying, "The Newark Yard project with CUOH is an excellent example of how public-private partnerships spark economic development and job creation by improving our transportation infrastructure."