Port Authority lines up shale deal for Buckeye Water District
EAST LIVERPOOL – The Columbiana County Port Authority brokered a deal that will result in the Buckeye Water District supplying water for oil and natural gas drilling operations in Carroll County.
The agreement approved at this week’s meeting of the port board clears the way for the BWD to sell a minimum of 30 million of gallons of water per year to R.E. Gas Development LLC, a subsidiary of Rex Energy, which has 15,400 acres under lease for drilling in Carroll County’s Utica shale formation.
Tracy Drake, chief executive officer of the port authority, said they became aware of the Rex’s search for a water source through Aqua Terra Asset Management, which was hired last July to find companies interested in purchasing water through the port authority.
Aqua Terra learned Rex was searching for a municipal water supply as the company prepares to increase its well drilling operations in Carroll County. Drake said the company was originally looking at running a waterline from the Ohio River in Wellsville up state Route 39 until he told them the BWD already has a waterline that runs along the same path to Salineville and the Carroll County line.
From there the parties were able to work out a three-year deal in which R.E. Gas will purchase a minimum of 30 million gallons of water annually for $6.60 per 1,000 gallons, with the port authority receiving 60 cents of that for its role in brokering the deal.
The BWD has already been paid in advance for the first 30 million gallons by R.E. Gas, which came to $200,000, according to BWD Director Al DeAngelis. The BWD in turn will pay the port authority $18,000, of which $5,400 goes to Aqua Terra for its fee.
DeAngelis said it his understanding that Rex Energy will tie into the BWD’s line and transport the water to storage ponds. From there it will be transported by truck to well sites for use in the fracking process, which can take up to seven million gallons of water per well.