NORWICH – The Norwegian natural gas company Nornew, Inc. continues its exploration and infrastructure development in Chenango, Broome and Madison counties despite a more stringent lending climate, dropping prices for natural gas and New York state regulatory issues.
The company’s third quarter report points to a total of 130,000 acres leased, 33 wells drilled this year and projections for 25 more wells into the Herkimer formation alone in 2009. With two more wells finishing up this week in Chenango County and two to go in the coming weeks, spokesman Dennis Holbrook said management will meet its fourth quarter projections.
The company has moved into a “preservation mode,” however, the spokesman said. The number of rigs in the area has been cut from four to two, and a partner is being sought to help develop Nornew’s mineral rights in the Marcellus and Utica shale formations.
[The Marcellus Shale, often called the ‘mother lode’ of natural gas deposits under the subsurface here, isn’t the only layer of abundant gas. Chenango County is fortunate to be on top of three rich formations: the Marcellus and Utica shales and the Herkimer sandstone.]
“It’s been challenging with the economy to keep moving forward,” Holbrook said Wednesday. “It’s not by accident that other companies are looking to get out of their lease agreements.”
Holbrook was referring to a Pennsylvania company that recently informed its 1,000 leaseholders that it wouldn’t be able to make contracted payments. Moreover, other gas companies are putting leased acreage out to bid to larger natural gas concerns.
Nornew, Inc. is the only natural gas concern that continues to be active in Chenango County despite some leases acquired early on by Fortuna, Chesapeake and others. It is also the only company building a pipeline south to the recently completed Millenium Pipeline in Broome County.
The company has already completed pipeline and a compression station near Beaver Meadow that currently pumps gas from wells via a New York State Electric and Gas line that connects to the Dominion Pipeline in Madison County.
“We are still a believer in this region. Other companies have talked about coming in, but you don’t see a lot of them pursuing what we have continued to pursue,” said Holbrook.
Procuring right-of-ways for the approximately 30-mile long main transmission line and multiple feeder lines has proved more difficult than planned, however. Holbrook said Nornew isn’t getting the cooperation it needs from municipal authorities to lay pipeline parallel to roadways.
“It’s common in other parts of the state for municipalities to allow us to run lines parallel. We haven’t been able to secure it over in Chenango County, which is odd,” he said.
The county’s public works department permitted Nornew to bore under county Rt. 16 in Plymouth last year, Director Randy Gibbon said, because the adjacent property owners had granted an easement for laying the pipeline. Gibbon said Nornew has not directly approached the county for right-of-ways parallel to roadways, but if it did, the company would be turned away.
“That would have to be done through property owners,” he said. “That’s the only way they could do it. By state law, utility companies are permitted to run parallel to roadways, but not private natural gas company lines. According to the attorney, they (Nornew) are not a true utility.”
Holbrook also called it “odd” that Chenango County opposes granting leases for county-owned land when the state of New York does.
“Your attorney say you can’t do it until forcibly integrated. That’s odd,” he said. “We have had positive experiences over the years. For us to come into Jamestown, for example, when they wanted services for a gas-fired municipal building ... We would have never been able to go into city with out their permission on the right of way.”
