How Many Ethane Pipelines will the Marcellus Shale Support?

In yesterday’s Pittsburgh Business Times, reporter Anya Litvak does a good job of analyzing the prospects for various ethane pipelines that may (or may not) be constructed from the Marcellus region to other geographies in order to process the ethane into ethylene (a raw material used in making plastics). She keyed off the news that the joint venture from El Paso Corp. and Spectra Energy to build a Marcellus Ethane Pipeline Systems (MEPS) didn’t attract enough interest for it to go forward.

However, as MDN mentioned yesterday, Enterprise Products Products is building an ethane pipeline and Chesapeake Energy will be its first customer (see this MDN story). That pipeline is due to go in service in 2014.

In addition, Sunoco Logistics and MarkWest are moving forward with a project to transport ethane through Project Mariner West to Sarnia in Ontario, Canada. Range Resources and Caiman Energy have both signed on to use that pipeline to get ethane to the NOVA Corunna cracker plant (see this MDN story). The new ethane service to Sarnia is due to go online in July 2013.

As Anya points out, there are two more projects supposedly in the works:

– An ethane pipeline from Kinder Morgan.
– An “eastern extension” to the Mariner project in southern PA and WV.

But those two projects are in doubt:

Kristen Holmquist, manager, energy analysis with Bentek Energy, an industry research firm in Colorado, said she doesn’t expect this project [Mariner’s eastern extension] to go forward. Same goes for Kinder Morgan’s bid, she said.

"If you look at the projects that have gone through, once those are online it’s not going to be until 2016 or 2017" that additional capacity would be needed, Holmquist said.*

So it looks like we’ll have two pipelines, and possibly a cracker plant (or two) in the region, to handle ethane from the Marcellus Shale. At least that’s the way it looks right now.

Editor’s Note: A big hat tip to Anya for mentioning MDN and linking to our story about WV officials being upset with Chesapeake over their commitment to the Enterprise ethane pipeline.

*Pittsburgh Business Times (Nov 6, 2011) – El Paso’s Marcellus ethane pipeline not in the cards