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130 Tanker Trucks/Day in Ohio End as Cornerstone Pipe Begins

Cornerstone Pipeline Route Map
Click for larger version

Last week MDN shared the good news that Utica Shale condensate (very light oil) had begun flowing through the new Marathon Petroleum Cornerstone Pipeline (see Utica Condensate Begins Flowing Through Cornerstone Pipeline). The Cleveland Plain Dealer published an interesting story about the pipeline on Saturday, explaining in depth what condensate is and how/why Marathon upgraded its refinery in Canton to handle it. However, it was another point made in the story that caught our attention. The MarkWest Energy (now a part of Marathon) processing plant in Cadiz, Ohio cleans and separates out condensate from other natural gas liquids (like ethane and propane) before sending the condensate to the Canton refinery. Until the Cornerstone went online, it took 130 tanker trunk trips PER DAY, operating around the clock, to cart the condensate from Cadiz some 60 miles to Canton (and then back for another pickup). While the trucks are still operating, for now, once the pipeline is fully operational and pumping at full capacity, it will end those truck trips…
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Utica Condensate Begins Flowing Through Cornerstone Pipeline

Cornerstone Pipeline Route Map
Cornerstone Pipeline Route Map – click for larger version

In December 2013 MDN first reported a new $250 million pipeline on the way in the Utica Shale from Marathon Petroleum Corporation, the largest refiner in the Utica Shale region (see Marathon Petroleum’s Newly Announced “Cornerstone” Utica Pipeline). The Cornerstone pipeline will stretch nearly 50 miles from the MarkWest cryogenic processing plant in Cadiz, OH northwest connecting to M3’s fractionator plant in Scio and M3’s cryogenic processing plant in Leesville along the way as it terminates and connects to Marathon’s refinery in Canton, OH. The pipeline will carry, at various times, crude oil, condensate and natural gasoline. From Canton, Marathon plans to move condensate and NGLs to Midwest refining centers and into Canada. In July the company said Cornerstone would be online by the end of this year (see MPLX Cornerstone NGL Pipe Done by End 2016, New Projects Coming). Yesterday the pipeline went online–at least part of it did–when Cornerstone flowed condensate from Cadiz to East Sparta…
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MPLX/MarkWest Working to Send NGLs to Canada, Gulf Coast

Cornerstone Pipeline Route Map
Cornerstone Pipeline Route Map – click for larger version

MPLX (i.e. Marathon Petroleum) has not just been sitting on its hands after buying MarkWest Energy last year for $15 billion (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). One of the plans from the beginning of the merger was/is to ship natural gas liquids (NGLs) produced in the Marcellus/Utica out of the region, particularly to the Gulf Coast where there are numerous processing plants that would pay a good price for it (see Marathon Hints MarkWest Merger Plan May Include NGLs to Gulf). Those plans, according to MPLX’s Executive Vice President of Corporate Planning and Strategy Pamela Beall, who spoke last week at the Shale Insight conference in Pittsburgh, are beginning to come together…
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Senior Management Change at Marathon’s MarkWest Subsidiary

riding into sunsetIn December of last year, one of the biggest and brightest stars in the midstream firmament for the Marcellus/Utica, MarkWest Energy, sold itself to Marathon Petroleum (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). As we pointed out at the time, the sale lined the pockets of investors and MarkWest’s top management (see Golden Parachutes Pop Open for MarkWest Top Management/Board). Two of the people in top management who benefited were John Mollenkopf, who was named executive vice president and chief operating officer for the new MarkWest unit (essentially taking over running MarkWest) and Gregory Floerke, who was named executive vice president and chief commercial officer of the new MarkWest unit. Last week Marathon announced that Mollenkopf is now riding off into the sunset (a very rich man), and Floerke will take has place running the MarkWest unit…
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MPLX Cornerstone NGL Pipe Done by End 2016, New Projects Coming

Cornerstone Pipeline Route Map
Cornerstone Pipeline Route Map – click for larger version

Marathon Petroleum Corporation’s MPLX midstream/pipeline division, which includes what used to be called MarkWest Energy, issued its second quarter 2016 update yesterday. Among the important bits of news, MPLX’s Cornerstone Pipeline is currently under construction and will be completed by the end of this year. Cornerstone is a $250 million, 50-mile natural gas liquids pipeline being built by Marathon from the MarkWest cryogenic processing plant in Cadiz (Harrison County, now owned by Marathon), northwest connecting to M3’s fractionator plant in Scio (also in Harrison County) and M3’s cryogenic processing plant in Leesville (Carroll County) before terminating and connecting to Marathon’s refinery in Canton, OH (see Marathon Petroleum’s Newly Announced “Cornerstone” Utica Pipeline). The pipeline will carry, at various times, crude oil, condensate and natural gasoline. From Canton, Marathon plans to move condensate and NGLs to Midwest refining centers and into Canada. Other exciting news: Marathon’s engineering teams continue to “evaluate synergistic projects” for the Marcellus/Utica, including “a butane-to-alkylate facility, a regional NGL export solution in the Northeast, and a long-haul pipeline to the Gulf Coast, such as a reversal of the Centennial Pipeline.” Very cool. Here’s the MPLX update…
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Updates on 3 Major OH Pipelines at Utica Midstream Seminar

update.jpgSome 160 people showed up for the Utica Midstream Seminar held yesterday at the National Football Hall of Fame in Canton, OH. The event, sponsored by the Canton Regional Chamber of Commerce and ShaleDirectories.com, provided updates on three major pipeline projects either under construction or soon to be under construction in the Buckeye State: Marathon Petroleum’s Cornerstone Pipeline, Spectra Energy’s NEXUS pipeline project, and Energy Transfer’s Rover pipeline project. Here’s what reps from each organization had to say about their respective projects…
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More on Cornerstone Pipeline – Batched Fluids, Connecting WV?

Cornerstone PipelineLast week MDN updated you on progress (or lack thereof) for Marathon’s Cornerstone Pipeline project–a 50-mile liquids pipeline connecting several processing plants in Ohio to Marathon’s refinery in Canton (see Cornerstone Pipeline Slightly Delayed, Construction Begins in May). We now have even more details about the project after Marathon officials briefed area reporters. Among the interesting tidbits: at various times during the day the pipeline will batch fluids and flow either natural gasoline or condensate. Also, after the current plan is done and the pipeline is operational (this fall), Marathon hopes to explore connecting a couple of WV processing facilities to the pipeline–one in Moundsville and another in Natrium…
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Cornerstone Pipeline Slightly Delayed, Construction Begins in May

In the middle of March MDN brought you the news that Marathon Petroleum was saying they would begin construction on the Cornerstone Pipeline “in the next several weeks”–meaning by the beginning of April (see Cornerstone Liquids Pipeline Set to Begin Construction in E Ohio). The timeline has been moved back a month. Marathon officials are now saying construction won’t begin until May. Cornerstone is a $250 million, 50-mile liquids pipeline being built by Marathon from the MarkWest cryogenic processing plant in Cadiz (Harrison County, now owned by Marathon), northwest connecting to M3’s fractionator plant in Scio (also in Harrison County) and M3’s cryogenic processing plant in Leesville (Carroll County) before terminating and connecting to Marathon’s refinery in Canton, OH (see Marathon Petroleum’s Newly Announced “Cornerstone” Utica Pipeline). The pipeline will carry, at various times, crude oil, condensate and natural gasoline. No reason was given for the delay…
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Cornerstone Liquids Pipeline Set to Begin Construction in E Ohio

The Cornerstone Pipeline, announced at the end of 2013, is a 50-mile liquids pipeline being built by Marathon Petroleum from the MarkWest cryogenic processing plant in Cadiz (Harrison County), OH northwest connecting to M3’s fractionator plant in Scio (also in Harrison County) and M3’s cryogenic processing plant in Leesville (Carroll County) before terminating and connecting to Marathon’s refinery in Canton, OH (see Marathon Petroleum’s Newly Announced “Cornerstone” Utica Pipeline). The pipeline will carry, at various times, crude oil, condensate and natural gasoline. Last fall Price Gregory, the company hired to build the Cornerstone, advertised for 400 workers (see Price Gregory Hiring 400 People in OH to Build Cornerstone Pipeline). Seems like it’s taken a long time, but construction of the pipeline is set to begin “in the next several weeks”…
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Pipeline Companies May Lose Big-Time if Chessy “Restructures”

Yesterday’s free fall of Chesapeake Energy’s stock based on rumors that the company may be considering bankruptcy (see today’s lead story) is not only affecting Chesapeake’s stock price. It’s also affecting the stock price of Energy Transfer Equity and Williams, two huge midstream companies. Why? ETE, you may recall, is in the process of buying Williams for $37.7 billion (see Looks Like a March 2016 Wedding for ETE & Williams). The main reason ETE is buying Williams, with its major presence in the Marcellus/Utica, is because of long-term contracts to use its pipelines in the northeast. One of Williams’ main customers with those long-term contracts is (yes) Chesapeake Energy. What if Chessy is forced to renegotiate or cancel or otherwise can’t honor those contracts? Whoops. There goes one of the big reasons for the deal in the first place. Which may explain why ETE’s stock went from $7.01 on Friday to closing at $4.09 yesterday (down 42%), and why Williams’ stock went from $17.11 on Friday to closing at $11.16 yesterday (down 35%). Here’s how/why Chesapeake’s troubles will not only affect ETE and Williams, but other midstream companies like Spectra Energy, Columbia Pipeline Partners and Marathon Petroleum as well…
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MarkWest Completed 3 Processing Plants in ’15, 5 More Coming in ’16

MarkWest Energy, now a subsidiary of Marathon Petroleum, reported its fourth quarter and full year 2015 results yesterday. Net income–revenue less expenses–was down for MarkWest in 2015, but at least the company is still in the black. MarkWest had $178 million in net income for 2014, and $157 million for 2015. Not too shabby considering the disastrous results many other companies have had. Net income for 4Q15 for MarkWest was a paltry $18 million, vs. $37 million in 4Q14. Among the operational highlights for MarkWest for 2015: The company commenced operation of one processing plant and two fractionation facilities in the Marcellus shale, increasing their total processing capacity by 200 million cubic feet per day and fractionation capacity by 73,000 barrels per day. Looking ahead to 2016, MarkWest says they have 10 major processing and fractionation projects currently under construction on a just-in-time basis, with five of the 10 expected to be completed in 2016. They expect to spend $1-$1.5 billion on capital expenditures in 2016. Here’s the update…
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Golden Parachutes Pop Open for MarkWest Top Management/Board

Last week MarkWest Energy Partners ceased to exist as an independent company (see MarkWest Energy Investors/Unitholders Approve Merger with Marathon). MarkWest “units” (equivalent to shares of stock) stopped trading on the New York Stock Exchange on Friday. The company became part of Marathon Petroleum. And when it did, high level executives at MarkWest, at least some of them, got new positions with Marathon. That is, according to the prediction of former MarkWest CEO and co-founder John Fox, MarkWest’s upper management and board members got golden parachutes (i.e. they personally benefited) from the sale of MarkWest. Here’s how they did…
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MarkWest Energy/Marathon Petroleum Exchanging Notes

do you like me noteRemember exchanging notes in grade school? “Do you like me? [ ] Yes [ ] No” Exchanging notes in the corporate world is a little more complex than that–but it seems to us like it’s not far removed from exchanging notes in grade school. In the case of high finance and the MarkWest Energy/Marathon Petroleum merger deal, the notes getting exchanged have (big) financial value and implications. MarkWest/Marathon are exchanging old MarkWest IOUs (notes) for new Marathon notes. If it doesn’t get delayed, the exchange will happen on Dec. 18–just in time for Christmas. Will it be a Merry Christmas for existing MarkWest note holders? If you can figure it out, please let us know…
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Marathon/MarkWest Investor Day: 9 New Opportunities in Midstream

Yesterday Marathon Petroleum, new owner of MarkWest Energy Partners, held an analyst and investor day at their Findlay, Ohio headquarters. During the meeting Marathon unveiled a $4.2 billion capital investment plan for 2016. Of that $4.2B, $1.2B will go to infrastructure projects for MarkWest, almost entirely in the Marcellus/Utica region. As part of the presentation Marathon/MarkWest detailed a list of nine potential investment opportunities that is pursued will cost between $6-$9 billion. Among those opportunities: building out pipeline infrastructure in the Rogersville Shale, and investing in “ethane cracker infrastructure.” Below is the press release issued by Marathon along with a copy of the investor presentation they used at the meeting (unfortunately we don’t yet have a transcript of the official presentation). We’ve indicated our favorite slides from the (extensive and long) presentation, slides we think you’ll find interesting too…
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MarkWest Energy Investors/Unitholders Approve Merger with Marathon

At a special meeting yesterday, the unitholders (i.e. shareholders) of MarkWest Energy voted to approve the merger/buyout offer from Marathon Petroleum. MarkWest will, by Friday of this week, become a wholly-owned subsidiary of Ohio-based Marathon. The approval comes after both co-founders of the company, John Fox and Brian O’Neill, came out strongly against the deal (see Both MarkWest Co-Founders Strongly Against Sale to Marathon). One of their criticisms is that current MarkWest management gets a “golden parachute” from the deal–they personally make boatloads of money for selling the company. But that didn’t seem to bother investors/unitholders who obviously think MarkWest combined with Marathon is better than MarkWest on its own. Here’s the official MarkWest announcement following the vote…
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Both MarkWest Co-Founders Strongly Against Sale to Marathon

There is a fevered battle going on to prevent Marathon Petroleum from consummating a deal to buy MarkWest Energy. Yesterday we told you that MarkWest was touting two more proxy advisory firms, in addition to a previously named advisory firm, have endorsed the deal (see War of Words Continues: 2 More Proxy Cos Endorse MarkWest Sale). We also told you that one of MarkWest’s two co-founders and a former CEO of the company, John Fox, is dead set against the deal (see Former MarkWest Energy CEO Urges Vote Against Marathon Buyout). The other MarkWest co-founder, Brian O’Neill, has now come out against the sale as well…
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