Airport Officials Announce Successful Commencement of Natural Gas Production
Multiple wells now online, airport to receive royalty payments
Allegheny County Executive Rich Fitzgerald, Allegheny County Airport Authority CEO Christina Cassotis, and CONSOL Energy COO Tim Dugan, announced Monday the commencement of natural gas production at Pittsburgh International Airport.
The event marked a critical next phase of the sweeping natural gas exploration, development and production partnership expected to continue through 2018, and bring hundreds of millions of dollars in economic development activity to the region.
The Airport Authority received a $46 million up-front payment as part of the deal and will receive 18 percent royalties on the gas. The beginning of gas production is a significant event which will result in the first royalty payments from CONSOL to the Airport Authority, providing a critical non-aviation revenue stream to help further reduce fees to airlines.
“We were thrilled to have the opportunity to explore this public-private partnership two years ago following an extensive public process. Today, we are celebrating the benefits of it as we see our airport benefitting from reduced costs and increased service,” Fitzgerald said. “Our region, as a whole, will continue to benefit with the start of production. With last month’s announcement of the ethane cracker plant being built just a few miles away from here, we look forward to even more advancements and opportunities within the natural gas industry.”
All six wells on Pad 2 have been turned in-line and are now flowing natural gas into the MarkWest midstream infrastructure system, which was constructed specifically for the project.
The Airport Authority will receive 18 percent in royalty payments from CONSOL based on the market rate of natural gas. Monthly production reports and payments to the Authority are expected to begin within months.
“Since the initial lease was signed and upfront payment received, we have reduced fees to airlines to their lowest rate in eight years,” Cassotis said. “Innovative partnerships like this with a local, world-class company like CONSOL are key in helping attract air service.”