Chesapeake Energy is pleased to be active in the city of Grand Prairie, Texas. Over the last several years, we have worked closely with our lessors and the city to create development plans throughout Grand Prairie that reflect the needs and concerns of both city and residents. However, recent developments and pending actions with the City of Grand Prairie may jeopardize the production of minerals and prohibit or delay future royalty payments throughout the City.
Texas Midstream Gas Services (TMGS) is a gas utility and subsidiary of Chesapeake Energy Marketing, Inc. In July 2007, TMGS purchased 44 acres in an agriculturally zoned district off of Matthew Road, south of I-20 in Grand Prairie for a compressor station. The City of Grand Prairie has refused to issue TMGS the necessary permits and is attempting to block the use of this land for its intended purpose. The inability to obtain the permits will jeopardize the shipment of up to 60 million cubic feet of gas per day to market.
After more than 14 months of good-faith negotiations to find a resolution, TMGS has filed suit against the City of Grand Prairie asking the court to allow TMGS to build the compressor station and allow the fulfillment of natural gas gathering and shipping contractual obligations.
You will likely be reading or hearing about this lawsuit in the news media, and we wanted to provide you more information.
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Why is a compressor station needed?
Compressor stations are a necessary part of the natural gas transportation process, and help move the gas through pipelines in order to carry it to market where it will be sold, which allows the benefit of royalty payments. This compressor station is part of a pipeline gathering system which will support the gathering of approximately 10,000 residents’ minerals, including the City of Grand Prairie.
Compressor stations bring the gas to the right pressure for safe and efficient transport through the pipeline network, converting the large amounts of gas derived from the Barnett Shale into a usable content. These stations can be quiet and non-invasive, similar to other public utility stations around town, which most people don’t even notice.
Mercado compressor station, located just north of Downtown Fort Worth.
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TMGS plans to initially locate three compressor units on the property west of Matthew Road, with two or three additional units projected as production demands. Each compressor will be enclosed by an acoustical building, which will virtually eliminate the sound produced, and the exterior will be landscaped. The size of the building with three compressors will be 60’ x 150’ and will be 25’ tall, and will include aesthetically-pleasing architectural features that will enhance and beautify the outside appearance of the building.
In addition, an existing natural buffer of more than 50 feet of mature, densely populated trees will provide a visual buffer for nearby residential communities.
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Who regulates pipeline and compressor stations?
The Office of Pipeline Safety in the U.S. Department of Transportation administers the federal regulation of pipeline safety, and the Texas Railroad Commission enforces these regulations on the state level. The Railroad Commission has exclusive control over the safety of intrastate “pipeline facilities” in Texas and a municipality may not adopt or enforce an ordinance that regulates pipeline safety.
That is to say, Grand Prairie is expressly prohibited from adopting or enforcing an ordinance that establishes a safety standard or practice relating to pipeline transportation or pipeline facilities. TEX. UTIL. CODE § 121.202.
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Until this litigation is resolved, the minerals from numerous wells in Grand Prairie may not be produced, resulting in the loss of potential royalty payments.
Please contact Chesapeake regarding any questions or concerns you might have about the TMGS compressor station or other operations in your neighborhood.
Contact us at AskChesapeake@chk.com or call 817.502.5000. You will be contacted within 48 hours by one of our Neighbor Relations Specialists.
Chesapeake would be pleased to create a customized presentation to your neighborhood or civic association. To schedule a meeting, please contact Laura Jones, Public Affairs Supervisor for Grand Prairie, at laura.jones@chk.com or 817-502-5632.
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