County could get access to natural gas tap, 200 acres on lateral line

Published 11:17 pm Tuesday, November 15, 2016

 

Buckingham County could have control and access to a natural gas tap off of a lateral line from the proposed Atlantic Coast Pipeline Project (ACP).

Kyanite Mining Corp. — one of Buckingham’s largest employers — has entered into a memorandum of understanding with Columbia Gas and ACP “to acquire a tap, metering and a decompression station and construction of a lateral pipeline off of (the ACP) that will provide natural gas to (Kyanite),” County Attorney E.M. Wright Jr. told members of the board of supervisors following a short closed session Tuesday night.

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When the county learned of Kyanite’s agreement, resulting in the tap and access to the natural gas, the county was approached about the possibility of entering into a memorandum of understanding with the firm “that would give the county the option to control approximately 200 acres through which this lateral pipeline would go.”

The tap to the lateral line from the 42-inch ACP, Wright said, would carry enough capacity “to handle the needs of Kyanite, plus maybe three to four companies the size of Kyanite.”

The county’s access to the tap and control of the 200 acres, along with Kyanite’s access to the natural gas, are contingent on federal regulators approving the project, being led by Dominion. The ACP project calls for a natural gas pipeline to be constructed, starting in West Virginia, spanning Virginia and ending in North Carolina.

The project includes construction of a 53,515 horsepower (hp) natural gas fired compressor station, slated for Route 56 between Shelton Store and Union Hill roads. On Monday, the county’s planning commission is set to vote on a special use permit to construct and operate the station.

According to Wright, the 200 acres would be available to be marketed at a fixed price as a site that would have gas and other amenities. “The county would not have to purchase that site initially. It would only have to invest money for the purchase if it had a real individual, which would leave that land on the tax rolls and it would transfer it to whoever might want at that time.”

Wright said two non-binding memorandums of understanding are needed from the county “so definitive agreements can be made.”

“If (Kyanite) did not need gas this wouldn’t even be happening,” County Administrator Rebecca S. Carter said. “I think what this means for the county (is) we’re going to be allowed, and we’ll have to do studies on the land to see if ifs marketable, to market a large property with natural gas availability. We will get an availability of that gas.”

One of the memorandums of understanding, Wright said, would be between the county and Kyanite “discussing the use of the land that would be available.”

The basic terms of the memorandum, Wright said, would include the county being able to control the 200 acres of land, the county having the ability to develop and control the specific site during the option period, which would span a significant amount of time, the cost of the land would be initially $2,500 per acre with adjustments for inflation, and if the site is developed, no harm of liability would fall on Kyanite.

The second non-binding memorandum of understanding would be between the county, ACP, Kyanite and Columbia Gas, Wright said. It would set forth the arrangement that there would be a tap, construction of the metering and decompression station, a lateral pipeline, off of that to serve Kyanite and the fact that the county would have the ability to take gas on this propery of which it would have control of.

The county’s financial commit, if moved to a definitive agreement, would be $260,000, “If we get the last little details worked out,” Wright said.

Wright noted that the memorandums regarding the tap are not tied in any way to the compressor station application being considered by the planning commission.

Following Wright’s report, supervisors voted 7-0 for District Six Supervisor and Board Chairman Joe N. Chambers Jr. and County Administrator Rebecca S. Carter to sign the non-binding memorandums of understanding once written.

“There’s a general location,” Wright said, following the meeting, of the lateral line from the ACP.

Kyanite Mining Corp. is located on Route 15 south of Dillwyn.

Wright said the length of the lateral line is about 1.5 miles to Route 15, adding that the 200 acres the county will have control over will have direct access from Route 15 or indirect access through a secondary road.

“If it happens, I think it would benefit the county,” Chambers said following the meeting. “We’ve already got a user in place.”