Va. company is building a Marcellus natural gas processor in W.Va.

Dominion Resources Inc. is building a $500 million natural gas processing plant in West Virginia, the latest industrial manifestation of the Appalachian shale-drilling boom.

The Richmond, Va., energy company announced Thursday that it would construct a processing and fractionation plant along the Ohio River in Natrium, W. Va., that would separate propane, butane, and ethane from gas extracted from the Marcellus Shale formation and, increasingly, the deeper Utica Shale.

Natrium is about nine miles upriver from New Martinsville, W. Va., where Bayer Corp. is recruiting petrochemical producers to build a billion-dollar plant to produce ethylene, one of the building blocks of plastics manufacturing.

Despite environmental concerns about shale-gas extraction, the governors of West Virginia, Pennsylvania, and Ohio are trying to outdo one another to attract gas-drilling and associated industries. West Virginia Gov. Earl Ray Tomblin on Thursday hailed the Dominion project, which would tap into existing pipelines, railroads, and barge routes to transport the fuels.

"The employment and economic expansion expected from the construction and operation of the Natrium plant in Marshall County confirms the strength of West Virginia's natural gas industry," Tomblin said in a statement.

High-value liquids such as ethane and propane are derived from the "wet" natural gas produced from Marcellus and Utica wells in Western Pennsylvania, West Virginia, and Ohio.

Chesapeake Energy Corp. announced recently that it believed the 1.25 million acres it has leased in eastern Ohio contained minerals worth $15 billion to $20 billion, which prompted Ohio Gov. John Kasich to call on his state to support an indigenous drilling industry.

"I don't want any foreigners working on wellheads," Kasich said in a speech last week. "Foreigners are people who come from Pennsylvania, Maryland, West Virginia, and Kentucky, and those distant foreigners from Texas."

When it goes into service at the end of 2012, the Natrium plant will process 200 million cubic feet of natural gas per day and separate 36,000 barrels of natural gas liquids per day.

More than 90 percent of the capacity is already under contract, much of it to Chesapeake.

Dominion plans to expand the plant eventually to process a total of 400 million cubic feet of natural gas per day, said Dan Donovan, a spokesman.