Marathon Begins to Build New 49-Mile Utica Pipeline in Ohio

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 stretches 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. It went online in September 2016 (see Utica Condensate Begins Flowing Through Cornerstone Pipeline). What we didn’t know/hadn’t noticed with all the talk and focus on Cornerstone, is that Marathon had also floated another 49-mile condensate pipeline project further west of Cornerstone, called HALI–the Harpster to Lima Pipeline. The purpose of the project is a pipeline “for efficient and safe delivery of condensate from the Utica Shale to refineries where it can be processed into gasoline and diesel in order to meet the needs of producers, mid-streamers, marketers, diluent blenders, and refiners as the Utica Shale continues to develop.” The project is now under construction and expected to go online in July. Although Marathon doesn’t really provide any details for the project on their website, we were able to locate a good bit of information about the project, which we share below…
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Marathon Dances to Corp Raider’s Tune, Former CEO Dissents

We always find it distressing when companies begin to tap dance to please corporate raiders. That is apparently what is now happening at Marathon Petroleum, owner of MarkWest Energy. We don’t pretend to fully understand what’s happening (this is all high finance stuff), but our impression is that Marathon is “dropping down” certain assets (i.e. moved from one legal corporate entity to another) more quickly than it otherwise would have, due to pressure on the company from Elliott Management, a so-called activist investor in the company. “Activist investor” is what used to be called “corporate raider” 25 years ago, which are companies or people who invest just enough in a company to control it, forcing the company to shed assets and fire people in order to boost the stock price–just to turn around and sell and make a quick buck. Apparently Elliott wants Marathon to a) move assets around from one company to another PDQ, and b) consider spinning out Speedway into its own company, or selling it. Speedway, you may or may not know, is Marathon’s retail gas filling station business. Speedway bought out and merged in the old Hess filling stations (see Marathon Petroleum Buys the Hess Truck! What Will We Do for Xmas?). Former MarkWest Energy CEO John Fox is none too happy about these machinations. Fox owns a bunch of Marathon stock and he issued a press release yesterday to pressure Marathon’s current leaders into slowing down and not being so eager to tap dance to Elliott’s tune…
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Corp Raider Pressures Marathon to Split Itself into 3 Companies

1017_1Not even a year go–in 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). We wondered at the wisdom of such a move, but who are we? What’s done is done. Ironically, an “activist investor” hedge fund (i.e. corporate raider) by the name of Elliott Management yesterday disclosed to the world that they have taken a 4% stake in Marathon. Corporate raiders target companies they can bully by buying enough shares to force those companies to fire people and sell assets. It “unlocks value for shareholders” you see–meaning it will boost the per share price of the raider’s stock so they can turn around and sell that stock and line their already-fat pockets. Disgusting. True to form, Elliott is targeting Marathon. They sent a letter to the Marathon board with the “suggestion” that the company split itself (after buying MarkWest less than a year ago) into three separate companies (retail, refining, midstream) in an effort to “unlock $14 – $19 billion for shareholders.” Unfortunately there are at least two other raiders lurking in the background with small stakes in Marathon who may join Elliott to pressure Marathon…
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Marathon Petroleum 3Q16: Profit Triples to $141M Thx to M-U

mplxMPLX, Marathon Petroleum Corp.’s fuels processing, transportation and logistics subsidiary, issued its third quarter 2016 update yesterday. MPLX reported that profits more than tripled, to $141 million, in 3Q16. MPLX is the owner of MarkWest Energy after buying them out late last year. One of the keys to MPLX’s increase in profits? Yep–the Marcellus/Utica. On an analyst phone call yesterday, MPLX’s president Don Templin said: “While other basins are in decline the Marcellus and Utica rich gas volumes continue to grow. For 2016 we continue to expect processed volumes to increase by approximately 15% year-over-year and gathered volumes to increase by approximately 20%. And in 2017, we expect an additional 10% to 15% increase in processed volumes compared to 2016.” Here’s the MPLX 3Q16 update…
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Centennial Pipeline Reversal “a Go” to Send NE NGLs to Gulf Coast

centenmapIn September 2015 MDN brought you the news that two joint venture partners, MPLX (Marathon Petroleum) and Enterprise Products Partners, were actively evaluating a plan to reverse the flow of the 795-mile Centennial Pipeline to send natural gas liquids (NGLs) from the Utica/Marcellus to the Gulf Coast (see Centennial Pipeline May Reverse, Sending NE NGLs to the Gulf). The Centennial began operation in 2002 after a 26-inch diameter natural gas line from Longville, LA into Bourbon was converted to refined light product service. At the same time, a new 24-inch diameter line was constructed from Beaumont, TX to connect to the existing 26-inch diameter line at Longville, TX. Since last year we had not heard any concrete plans–until now. Yesterday at the S&P Global/Platts ninth annual Appalachian Oil & Gas Conference in Pittsburgh, Enterprise announced it is “a go” to reverse the Centennial…
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MarkWest Building New Processing Plant in Washington County, PA

markwestLast week MDN reported that electric company FirstEnergy has begun construction of a new electric substation in Washington County, PA to provide electricity to “support two natural gas processing facilities being developed in the area” (see Work Begins on $40M Electric Substation in W PA to Help Marcellus). We speculated that at least one of the beneficiaries would be MPLX’s MarkWest Energy subsidiary. We were right. NGI’s Shale Daily is reporting that one of the projects to be served by FirstEnergy’s new substation will be the MarkWest Harmon Creek Complex, a new processing plant being built to process natgas for Range Resources…
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Marathon’s Billion Dollar Bet on the Utica Shale

1 billionMarathon Petroleum, which purchased midstream company MarkWest Energy last year, continues to grow and expand–because of the Utica Shale. Marathon operates a refinery in Canton, OH that processes crude oil. Question: Did you know that 25% of the crude oil being processed at the Marathon refinery comes from the Utica Shale? No, we didn’t know that either! Marathon has made some big bets on the Utica. In fact, over the past two years, they’ve bet more than $1 billion on the Utica…
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Cornerstone Pipe Now Flowing, “Backbone” of MPLX Utica Strategy

Cornerstone Pipeline Route Map
Click for larger version

In September MDN reported that part of Marathon Petroleum’s Cornerstone Pipeline began to flow condensate (see Utica Condensate Begins Flowing Through Cornerstone Pipeline). The approximately 50-mile pipeline was built to flow natural gas liquids (NGLs) 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 before terminating at Marathon’s refinery in Canton, OH. In September condensate was flowing from Cadiz to East Sparta. Good news! The entire pipeline is now up and running. In a surprising statement announcing full operations for the pipeline, Marathon CEO Gary Heminger said, “Cornerstone is the backbone of our Utica shale strategy.” That shows the immense importance the company places on this new pipeline…
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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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