Enterprise Wants to Build Ethane Pipeline to Gulf Coast

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Enterprise Products Partners L.P. is planning to build a major new pipeline to transport ethane from the Marcellus and Utica Shale regions in Pennsylvania, West Virginia and Ohio to the U.S. Gulf Coast.

The second largest component (by volume) to come out of the ground in shale gas drilling is the chemical ethane. Somewhere between one and six percent of natural gas coming from the ground is ethane, which can be converted to the hydrocarbon ethylene. Ethylene is the “feedstock” (or raw material) used to make most plastics, including polyethylene and PVC. Enterprise wants to provide a way for ethane to reach the ethylene processing plants along the Gulf Coast.

The approximately 1,230-mile pipeline would have an initial capacity of 125,000 barrels per day (BPD), and can be quickly expanded to meet increased shipper demand. The pipeline would deliver ethane to Enterprise’s natural gas liquids storage complex at Mont Belvieu, Texas. Through connections at Mont Belvieu, ethane production from the Marcellus and Utica shales would ultimately have direct or indirect access to every ethylene plant in the U.S. The pipeline would be expected to begin commercial operations in the first quarter of 2014.

"For more than a year, we have been working with producers in the Marcellus Shale play, and more recently the Utica Shale, to address the growing logistical needs to transport their ethane production and facilitate natural gas production from this liquids-rich region," said A.J. "Jim" Teague, executive vice president and chief operating officer of Enterprise’s general partner. "We have also built facilities to serve the petrochemical industry on the Gulf Coast as it continues to expand its use of price-advantaged domestic ethane over more expensive imported crude oil derivatives. By providing access to the Gulf Coast petrochemical market, our ethane pipeline offers a timely, cost-effective and expandable solution for meeting the country’s long-term needs from both an energy supply and demand perspective."

The project would utilize a combination of new and existing infrastructure. The northern portion of the proposed system involves construction of a pipeline that would originate in Washington County, Pennsylvania and extend west, then southwest, following existing pipeline corridors in order to minimize the footprint of the project. At Cape Girardeau, Missouri the pipeline would interconnect with Enterprise’s existing 16-inch diameter TE Products Pipeline, which would be reversed to accommodate southbound delivery of ethane to the U.S. Gulf Coast. At the terminus of the existing Enterprise TE Products Pipeline in Beaumont, Texas, the partnership would construct a 55-mile pipeline to the Mont Belvieu facility.*

Shipping ethane to plants on the Gulf Coast is one way to do it. The other way is to build a “cracker plant”—a plant to process the ethane—somewhere in the Marcellus and Utica Shale region, which is the approach being taken by Shell and perhaps others. Shell previously said they will announce by the end of 2011 where they want to build a $2 billion dollar cracker plant (see this MDN story).

The advantage of having a “local” cracker plant, rather than shipping the ethane to the Gulf Coast, is the investment a cracker plant will bring to the region, including thousands of new jobs and billions of dollars in investment and revenue.

*Enterprise Products Press Release (Oct 11, 2011) – Enterprise Begins Open Commitment Period for Ethane Pipeline from Marcellus/Utica Shale to Gulf Coast