Drilling For Gas At PIT
In early 2013, the Allegheny County Airport Authority decided to explore the possibility of leasing the mineral and gas rights to the property, hoping to generate significant income to accelerate the payoff of the facility’s mortgage and lower landing fees to make the airport more competitive to the airlines and more attractive to flyers.
Consol Energy Wins PIT Concession
Consol Energy submitted the winning bid to extract natural gas from the site and will make an initial payment or signing bonus of $46.3 million (spread over 5 years) and royalty payments that are expected to total at least $500 million over the 20-50 year life of the gas field. Consol expects to spend another $500 million on supplies and sub-contractors during the 3-5 year development of the gas field.
Since this large project is being done on Allegheny County-owned land in a populated area, more details are being released than for gas fields developed on private land.
The time schedule the development is:
- September 2012 – Allegheny County Airport Authority requests proposals for drilling rights at Pittsbugh airport
- December 2012 – Propsals received, evaluation perid begins
- February 2013 – Allegheny County Council approves contract with Consol Energy for extracting natural gas from airport property
- August 2013 – Preliminary drilling plan released by Consol, public informational meeting held
- October 2013 – Seismic testing at the site
- Spring 2014 – Well site construction (drilling pads) begins
- Summer 2014 – Construction of 3 impoundment ponds, 12 miles of water pipelines, 17 miles of gas gathering pipelines, access roads
- Fall 2014 – Vertical drilling begins
- Winter 2014 – Horizontal drilling begins
- 2015 – gas production begins
The lease requires an initial payment of $1,500 per acre and a 17 percent royalty fee on all the extracted gas. Kit Pettit, an attorney at the Downtown Pittsburgh firm Bernstein-Burkley, reviewed the lease documents and concluded the county did very well – the deal compares quite favorably with the more than 1,000 drilling leases he has reviewed for local landowners.
Consol Submitts Drilling Plan
Consol has developed a drilling plan to extract the gas without impacting the airport operations, runways, terminals, parking areas, hotel, or public roadways. The plan will need to be approved by the airport authority, PA DEP, and the FAA. The plan was released during a press conference on Aug 27th followed by a public information session for residents of the surrounding area.
The proposed drilling plan is for 6 well pads containing 47 gas wells. 3 lined impoundment ponds and 17 miles of gathering pipelines. Seismic testing in and around the airport property will begin in late October 2013, however, the first test wells will not be drilled until third quarter of 2014. The wells will be about 7000 feet deep and will extend out horizontally up to 11000 feet. They will go under airport runways. Consol released a site map showing the locations of the drilling pads and impoundment ponds.
Consol has also contacted the owners of nearby properties to determine their interest in being included in the drilling project and is discussing the purchase of large volumes of fracking water with several local water authorities.
About Pittsburgh International Airport
Pittsburgh International Airport (PIT) is the major airport facility for Pittsburgh, PA (USA) and the surrounding region of 3 million people. More than 8 million travelers use the facility each year. There are 148,000 landings / takeoffs per year – about 155 non-stop flights per day to 37 distinct destinations by 12 commercial air carriers. The Allegheny County Airport Authority owns and manages the site which consists of almost 10,000 acres with a terrain of mostly rolling hills. An interstate highway (I-376) connects the airport to downtown Pittsburgh to the east and to the PA Turnpike to the north.
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