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Pittsburgh airport seeking bids from gas drilling companies

| Thursday, Sept. 20, 2012, 1:08 p.m.

Allegheny County Airport Authority said Thursday that it is seeking bids from companies interested in drilling for gas at Pittsburgh International Airport in Findlay and at Allegheny County Airport in West Mifflin.

“Seeking leases for gas drilling is an important means of generating nonaviation revenue that will reduce the cost of operations for the airport authority. That, in turn, could help reduce fees to the airlines, which benefits passengers,” authority Chairman David Minnotte said.

The authority sought bids from drillers four years ago, but natural gas prices plummeted just before it put out a request seeking $4.5 million in minimum royalties during the first 18 months of a lease and ongoing royalties of 25 percent on gas produced. No companies submitted bids.

The current request seeks royalties of 18 percent on gas produced. Companies also must make bids to lease the properties' combined 9,263 acres. The authority hasn't set a minimum bid for the land.

“We want to make sure we get market rate for the land,” said airport authority's Development Director Randy Forister.

Average lease prices in the region range from $2,500 to $3,800 an acre, said Pittsburgh lawyer Steven C. Townsend, co-owner of ShaleAdvice LLC, which represents landowners in drilling deals. “I can't imagine them not being able to command at least $3,500 an acre,” he said.

At the average rates, the airport authority could expect to collect between $23.2 million and $35.2 million from the land lease.

Kathryn Klaber, president of the North Fayette-based Marcellus Shale Coalition, said the airports' properties are “certainly attractive because of the contiguous acreage.” She added, though: “It's a challenging time to be looking at additional leases when there are quite a few existing leases to develop and with natural gas prices below $3 (per million British Thermal Units).”

Tom Fontaine is a staff writer for Trib Total Media. He can be reached at 412-320-7847 or tfontaine@tribweb.com.

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