There’s more than one way to get ethane to a cracker plant. MDN has chronicled the debate over whether pipelines to other regions like the Gulf Coast or Canada, or locally built ethane cracker (processing) plants, or a mix of the two, should be used to process the ethane-rich “wet gas” from the Marcellus and Utica Shales. Four ethane pipeline projects and at least one locally built ethane cracker plant have been promoted by various companies. Two of the four pipelines are “solid” and moving forward. The other two, according to one analyst, are in doubt (see this MDN story).
One of those projects “in doubt” may be less doubtful since Friday, when PA U.S. Senator Pat Toomey pushed through legislation to help the Mariner “Eastern extension” project. The Mariner West pipeline (one of the solid projects moving forward) will move ethane from the Marcellus region to Sarnia in Ontario, Canada, to the NOVA Corunna cracker plant. Range Resources and Caiman Energy are both signed up to transport ethane via Mariner West. A new project would run a branch from the Mariner pipeline to Marcus Hook near Philadelphia, on the Delaware River, and from there load it onto liquefied natural gas (LNG) carrier ships, and ship it to the Gulf Coast for processing at the cracker plants in that region. Legislation passed last Friday in the U.S. Congress now makes Mariner East more possible.
The U.S. Congress approved delayed legislation on Friday that will allow Sunoco Inc. to transport ethane, a form of liquefied natural gas (LNG), from the Philadelphia area to the Gulf Coast.
By unanimous consent, the House on Friday approved a bill that permits three LNG tankers to participate in "coastwise" trade – carrying cargo between U.S. ports. The Senate approved the legislation on Thursday.
The Mariner Project, a joint venture between Sunoco Logistics Partners L.P. and MarkWest Energy Partners L.P., would transport ethane produced from the Marcellus Shale by pipeline to Marcus Hook and then by sea to the Gulf Coast, where ethane is used to make plastics.
Because there are no qualified U.S.-flagged LNG vessels available to carry the fuel between Marcus Hook and the Gulf Coast petrochemical plants, the Mariner Project needed a waiver to the Jones Act, the 1920 law that protects markets for U.S. vessels.
U.S. Sen. Pat Toomey and U.S. Rep. Pat Meehan, whose district includes Marcus Hook, promoted the Jones Act waivers. The Republicans argued the project would generate 300 to 400 new construction jobs and 25 long-term jobs to operate the shipping terminal.
The three LNG tankers are American-built, American-owned vessels that now fly foreign flags. Reflagged as U.S. vessels, the ships must also employ U.S. crews and be maintained in America.*
*Philadelphia Inquirer (Nov 19, 2011) – Congress approves shale-gas tankers for Sunoco operation