Fitzgerald says Consol bonus payment for shale drilling on airport land could double

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The Allegheny County Airport Authority may now stand to receive a $40 million bonus payment from natural gas drilling on Pittsburgh International Airport land -- double what previous reports suggested.

Allegheny County Executive Rich Fitzgerald said today he expects ongoing negotiations with Consol Energy Inc., which submitted the winning bid last month to drill on airport land, will end with a much higher lump sum payment than the $21 million originally projected.

The authority could get $35 million to $40 million up front with another $3 million to $4 million in yearly royalty payments, he said.

"It's not firm, but something we're working towards," he said.

In December, both EQT Corp. and Consol subsidiary CNX Gas Company LLC submitted bids to begin Marcellus Shale drilling on the authority's 9,300 available acres, a hodgepodge of brownfields and scattered industrial development.

EQT's proposal offered a per-acre advance price of $4,750, which would have generated $44 million. It was more than double what Consol offered -- $2,250 per acre, or $20.8 million.

But the authority chose Consol's lower bid, saying their offer left leeway that could end up being more profitable for the authority in the long run.

Fitzgerald said negotiations with Consol continue.

Fitzgerald said he plans to ask county council's permission to allow drilling on airport land, a necessary step before the rigs can move in. He said drilling could begin within 18 months.

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Andrew McGill: or 412-263-1497.


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