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Blue Racer Barges NGLs to Gulf Coast on the Ohio River

Blue Racer Midstream logoThis post will not make anti-fossil fuel nutters happy. You know how antis have moaned and groaned at the prospect of allowing barges on the Ohio River to transport produced water–naturally-occurring salty water that comes out of the ground long after fracking operations are over. Antis complained so much that the Obama Administration politically prevented the Coast Guard from moving forward with a barging plan (see Coast Guard Caves to Political Pressure, No Wastewater Barging). The “funny” thing is, there are substances 100 times more toxic than produced water traveling on barges up and down the Ohio every day! But let’s not let facts get in the way of a good [drug-induced hippie] protest, right? In June we brought you the story that Blue Racer Midstream, a joint venture between Caiman Energy II and Dominion that owns several natural gas processing and fractionation plants, 650 miles of natgas gathering pipelines, and 155 miles of NGL and condensate pipelines in OH and WV, is planning to barge NGLs (natural gas liquids) from their facilities in WV down the Ohio River to the Gulf Coast (see Blue Racer Midstream to Begin Barging on Ohio River This Year!). The exciting news is that Blue Racer began their NGL barging program in October…
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PA County Judge Attacks Mariner East 2 Status as Public Utility

court-gavel.jpgSunoco Logistics Partners, the builder of the Mariner pipeline projects, has fought a long and hard legal battle to be recognized as a public utility in Pennsylvania–especially with regard to the next big project in the lineup, the Mariner East 2 pipeline. ME2, as it’s called, is a $2.5 billion, 350-mile natural gas liquids (NGL) pipeline that will run from eastern Ohio through the state of Pennsylvania to the Marcus Hook refinery near Philadelphia. From the beginning anti-pipeline fanatics have tried to derail the project by claiming it is not a public utility (with the right of eminent domain) as defined by PA’s statutes. In July 2014 two administrative law judges working for the PA Public Utility Commission (PUC) said ME2 is not a public utility (see Setback for Mariner East NGL Pipe – Judges Say Not Public Utility). But a few months later, the Commissioners of the PUC overruled them and said yes, it is a public utility–always has been, always will be (see Major Milestone: PA PUC Rules Mariner East IS a Public Utility). However, the antis continued to challenge it in court. Finally, in July 2016, PA’s Commonwealth Court in hearing an appealed case ruled in favor of Sunoco, saying that ME2 is regulated by both the PUC and the Federal Energy Regulatory Commission (FERC), and it therefore has the right to use eminent domain (see Sunoco LP Wins Major Court Decision for Mariner East 2 Pipeline). However, a county judge in Lebanon, PA has just rendered a decision that once again attempts to question ME2’s classification as a public utility. The decision, and how it impacts ME2, is complicated…
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Mountaineer NGL Storage Test in OH a Success, Construction in 2017

Mountaineer NGL StorageIn April of this year, Mountaineer NGL Storage announced an open season for a new underground NGL storage facility in Monroe County, Ohio, near Clarington, along the Ohio River (see New Company Announces Open Season for NGL Storage in Ohio Utica). Natural gas liquids (NGLs), including ethane, would be stored at the facility. It is a key, missing component in a plan to build at least one, and likely more than one ethane cracker plants in the region. Storage facility for both natural gas and NGLs is a critical part of natural gas infrastructure. Mountaineer recognized the fact that the Marcellus/Utica will need such a storage facility. A month after the open season, Mountaineer announced it was successful and that they would move forward with the project (see Mountaineer NGL Storage Open Season Successful, Development Begins). An important, initial step in building such a storage facility has now taken place. Mountaineer completed a test well in the salt formation–testing it for thickness. The test was a success. Construction is planned for the latter part of next year…
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DB Takeaways from 9th Annual Appalachian Oil & Gas Conference

reporter-notebookOne of the largest banks in the world (#11) is the German-based Deutsche Bank. They have major branches in dozens of countries, including the U.S. The Equity Research – North America operation of Deutsche Bank attended the Platts 9th Annual Appalachian Oil & Gas Conference in Pittsburgh earlier this week. The DB analyst who attended wrote up notes and shared them. We found the writeup interesting and thought you would too…
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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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Marcus Hook Refinery Already Exporting Propane – Who Knew?!

who knewWe spotted what is, to us, a fascinating story about propane use across the country. There are those, like LP Gas magazine, that closely watch usage trends for propane. As you may know, propane is an NGL, or natural gas liquid. It is one of the hydrocarbons that comes out of a borehole drilled to extract either oil or natural gas. Along with oil and gas other hydrocarbons come out of the hole–NGLs like propane, ethane, butane, etc. One of the places propane is increasingly produced, and consumed, is in the northeast–because of Marcellus/Utica drilling. The sharp editors at LP Gas noticed an historically unusual trend–a spike way up in propane usage in one of the main regions tracked, in the northeast. The explanation for the spike up in usage? Propane is getting exported from the Marcus Hook refinery. Therefore much larger volumes of propane are being “consumed” by those exports. Which we find fascinating. We are producing AND consuming propane within the Marcellus/Utica region. That is, we’re generating wealth by exporting propane. We knew about ethane exports already happening at Marcus Hook (see Bon Voyage! First Ethane Export Ship Leaves Marcus Hook in Philly). And we knew that it’s been in the plans to export propane (see Rex Energy Cuts Deal to Export Ethane, Propane to Europe via Philly). What we didn’t know is that propane exports are *already happening* from Marcus Hook…
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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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SEPA Town Votes to Allow Mariner East 2 Across Town Land

Yes No tickbox with green YES tick
Yes No tickbox with green YES tick

MDN has previously highlighted the fight to build the Mariner East 2 pipeline. Town by town, opponents of the pipeline have tried to stop it with zoning regulations. And town by town, those efforts are failing. A prime example is Middletown, PA, in Delaware County (near Philadelphia). The Middletown Town Council voted earlier this month to put an ordinance on the docket for council members to vote on at the Sept. 26 meeting, an ordinance that if passed, will allow Sunoco LP to move forward with building the pipeline on public land in the town–in one case across a park, and in another close to an elementary school (see PA Town’s Angst Over Mariner East 2 Pipeline Near School, Park). Town council members faced heaving criticism and opposition, but in the end they did the right thing. Monday night the Town Council voted to grant permits to Mariner East 2, provided there are certain safeguards…
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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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UTOPIA Pipeline Still Battling OH Landowners with Eminent Domain

UTOPIA Pipeline Project map
UTOPIA Pipeline Project map – click for larger version

Kinder Morgan’s UTOPIA (Utica To Ontario Pipeline Access) pipeline is a 12-inch ethane pipeline that will run 240 miles and will only be built in Ohio–therefore the Federal Energy Regulatory Commission (FERC) won’t be involved in permitting the project. In April we asked the question, Why is UTOPIA Pipeline Less “Controversial” than NEXUS in Ohio?. Perhaps that question was premature, because not long after we ran a story that Kinder Morgan was suing holdout landowners using eminent domain to allow the pipeline (see UTOPIA Pipeline Sues Holdout OH Landowners Using Eminent Domain). The real eye-popper was reading just how much Kinder Morgan was offering for easements to property owners. Of course what a landowner is offered depends on how many feet of land the pipeline will cross. Some landowners were offered up to $63,300 for an easement. In some cases, the offers were “more than 10 times the appraised value of the easement.” It’s certainly in a landowner’s best interest to settle before being forced to settle (for far less) via eminent domain. So how is the process going? The lawyer for one group of landowners says KM’s offers are low, not high. Here’s an update on the legal battles in the Buckeye State over UTOPIA…
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Williams Considers Selling its Gulf Coast Ethane Cracker Plant

Williams Geismar Olefins facility
Williams Geismar Olefins facility – click for larger version

Williams, because of evil corporate raiders like Keith “Mini-Me” Meister, continues to be in a fight for its very existence (see Corvex Raider Launches Hostile Takeover Attempt of Williams). In an effort to shore up the company–make it stronger AND produce cash that can be used for various purposes–Williams announced in August they are selling their Canadian assets for $1 billion (see Bold Move – Williams Selling Canadian Assets). Yesterday the company announced another potential asset sale–the company’s 88.5% ownership interest in the Geismar, Louisiana olefins petrochemical plant…
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Kent State Study: UTOPIA Pipeline to Yield $237M for Ohio Economy

Utopia Project
Click for larger version

As MDN reported yesterday, Kent State University researchers have just issued a report evaluating the economic impact of the proposed Kinder Morgan UTOPIA (Utica To Ontario Pipeline Access) project on the State of Ohio. UTOPIA is a 12-inch ethane pipeline that will run 240 miles across Ohio, connecting with another pipeline that will shuttle Utica/Marcellus ethane all the way to a cracker plant in Sarnia, Ontario. The Kent State study estimates this tiny pipeline project will contribute a whopping $237.3 million to Ohio’s economy, creating 2,132 direct and indirect jobs in Ohio and generating $4.9 million in yearly tax revenues. Below is a press announcement from Kent State with a good overview of the study, followed by a full copy of the study, which is titled: “Economic Impact of Kinder Morgan Utopia Pipeline Project”…
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NGL Exports Driving Pipeline Projects in OH & PA

Mariner East 2
Mariner East 2 – click for larger version

NGLs (natural gas liquids, including ethane, propane and butane) are changing the midstream game in Ohio. We spotted a story in the Youngstown Business Journal that talks about shipping NGLs out of the Marcellus/Utica region–exporting them to other markets both domestic and international. A fascinating part of the article is an interview with Sunoco Logistics Partners about their Mariner East 1 and 2 projects and what Sunoco LP has planned…
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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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