Marathon Considers Building NGL Storage Hub in Harrison County, OH

Some major news coming from yesterday’s Utica Midstream conference held in North Canton, Ohio. A rep from Marathon Petroleum (which is based in Ohio) told conference attendees his company is contemplating building an underground NGL storage facility in Harrison County, OH–to store ethane, butane and propane.
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NGL Energy Buys Northeast Propane Terminals from DCP Midstream

We spotted an interesting announcement from NGL Energy Partners that the company has just closed on the purchase of seven natural gas liquids terminals in the Eastern United States, purchased from DCP Midstream for an undisclosed amount. What’s interesting is that some of the terminals, most of them located in the Marcellus/Utica region, are capable of exports. NGL Energy says they plan to export butane from one of them. Might that be M-U butane?
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The Future of Ethane Exports from Marcus Hook, PA

Ethane exports came from nowhere, dead zero, three years ago and took off like gangbusters until mid-last year, in no small part because of Marcellus/Utica ethane exports coming from the Marcus Hook refinery near Philadelphia. But part of the way through last year those exports began to decline–and not because of lack of ethane flowing through the Mariner East pipelines. Nope. They declined due to lack of demand.
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EIA Says NGL Production Will Grow Massively in Marcellus/Utica

The U.S. Energy Information Administration recently published its Annual Energy Outlook for 2019. Among the numbers EIA released are predictions about how much natural gas liquids (NGLs) the U.S. will produce between 2018 and 2050. EIA says production will go up 32% over that period, to 5.8 million barrels per day (b/d). Guess where most of that increase will come?
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PA PUC Begins Geologic Testing Near ME1 Sinkhole

A couple of developments to share with you about the Mariner East 1 NGL pipeline which has been completely shut down since Jan. 21 when a new sinkhole appeared in Chester County exposing a few feet of the bare pipe (see New Mariner East 1 Sinkhole Appears, PA PUC Shuts Down Pipeline).
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Delayed ME2 Pipeline Cost PA a $675M Plastics Plant + 1K Lost Jobs

Braskem USA, headquartered in Philadelphia had a decision to make in 2016: Locate a new polypropylene plant in their own backyard, at the Marcus Hook refinery site on the outskirts of Philly–or locate it in Texas. They picked Texas because not enough NGLs (propane) were flowing to Marcus Hook due to delays (caused by Big Green lawsuits) in the Mariner East 2 pipeline.
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East Coast Dominates LPG Exports via Philly’s Marcus Hook

According to RBN Energy, “U.S. production of natural gas liquids is projected to increase by 17% this year, and by another 10% in 2020.” NGLs cover a variety of hydrocarbons. Two NGLs, propane and butane, are further classified as LPG–or liquefied petroleum gas. Of the four “smaller” LPG export facilities here in the U.S., two-thirds of all exported LPGs last year came from one–Energy Transfer’s Marcus Hook refinery near Philadelphia.
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Sunoco Fined $225K for Small Leak on ME1 Pipeline in 2017

The Mariner East 1 pipeline sprung a small leak and spilled 20 barrels (~840 gallons) of ethane and propane in Berks County, near Philadelphia, on April 1 (see Mariner East 1 Sprang a Small NGL Leak Near Philly, on Apr 1). Sunoco Logistics Partners (i.e. Energy Transfer), builder and maintainer of the pipeline, shut it down and fixed it over the next several days. The Pennsylvania Public Utility Commission (PUC), which oversees regulation of the pipeline, has just (a year and a half later) “requested” Sunoco pay $225,000 for violating various state and federal regulations. It was an $11,250 per barrel spill.
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Appalachian NGL Storage Hub Enters Phase 2 – Built in 2-3 Years?

Last week MDN friend and ace reporter Rick Stouffer from Kallanish Energy hosted a one-day event in Pittsburgh called “Kallanish New Horizons: Appalachin Basin.” One of the speakers was Denise Brinley, senior energy advisor for the Pennsylvania Department of Community & Economic Development. She addressed the topic of an NGL (ethane) storage hub. We’ve written a number of posts on what was originally billed as a $10 billion project, to be located somewhere in the Marcellus/Utica region–most likely West Virginia (see Is the Appalachian NGL Storage Hub Close to Reality?). Brinley tossed out some numbers last week that are different from (contrary to) numbers we’ve seen in the past. For example, she says the facility will cost $2.5 billion to build, not the $10 billion number we’ve seen quoted so often. She also said said such a facility will open in 2-3 years, which is the first time we’ve seen any potential time frame pegged for building it.
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DOE Reports Gives Full-Throated Support for Appl. NGL Storage Hub

Continuing on the topic of the NGL storage hub that is today’s lead story (see Appalachian NGL Storage Hub Enters Phase 2 – Built in 2-3 Years?), a number of politicians previously lobbied the U.S. Department of Energy to study the issue of if, and where, a natural gas liquids (NGL) storage hub should be located. Namely, West Virginia’s two U.S. Senators, Shelly Moore Capito and Joe Manchin, were behind the request for a DOE study (see WV’s US Senators Lead the Charge to Build $10B NGL Storage Hub). The hope was/is that DOE would find justification (and throw government backing) behind a proposed $10 billion NGL storage hub project. Yesterday the DOE issued their report to Congress, titled “Ethane Storage and Distribution Hub in the United States” (full copy below). Here’s something really cool for us at MDN HQ: Marcellus Drilling News is referenced (quoted) twice in the report!
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Open Season – for Mariner East Pipelines?!

We spotted a notice from Energy Transfer, the company building (via its Sunoco Logistics Partners unit) the Mariner East pipeline projects, that seemed odd to us. It was an open season announcement, a time when companies can “sign on the dotted line” to reserve capacity along any of the three pipelines–Mariner East 1 (ME1), Mariner East 2 (ME2), or Mariner East 2X (ME2X). ME1, a repurposed gasoline pipeline built in the 1930s, has been up and running since 2016. ME2 & 2X are due to go online any day now. ME2 and 2X (built side-by-side) are about two years behind schedule. Normally a pipeline company won’t dig one shovelful of dirt or lay an inch of pipeline until/unless customers have already signed up during an open season. And yes, all three pipelines have had open seasons and have signed-up customers eager to use them. So what’s with this new open season? We think we know.
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New NGL Pipeline in Clarion County, PA Ready to Go Online

We pride ourselves on keeping close tabs on the market. Yet somehow the construction of a smallish NGL (natural gas liquids) pipeline gathering system in western PA slipped by us. The pipeline is now built and the builder, Stonehenge Energy Resources, is putting the “finishing touches” on the Stonehenge Laurel – Clarion Pipeline System before it goes live. The pipeline will connect to Laurel Mountain Energy’s wells in Clarion County and collect up the NGLs (things like ethane and propane) from those wells and flow it neighboring Butler County where the NGLs will hitch a ride via Energy Transfer’s Revolution Pipeline system to Washington County, PA where they will get cleaned up and separated.
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Energy Transfer 3Q18: Mariner East 2 Pipeline Online by Christmas

Yesterday the muckety-mucks from Energy Transfer (ET) held a conference call with Wall Street analysts to discuss the company’s third quarter 2018 update. Inevitably on such calls there’s talk about what’s coming up in addition to what happened in the previous quarter. ET is a big midstream (pipeline) company. Among their projects are the mighty Rover Pipeline, which reaches from Pennsylvania, West Virgina, and eastern Ohio all the way into Michigan, and the Mariner East 2 Pipeline, which runs from eastern Ohio all the way through Pennsylvania to the Philadelphia area. Rover flows natural gas, ME2 (and ME2X) will flow NGLs, mainly ethane and propane. According to Tom Long, ET’s Chief Financial Officer, ME2 will be up and running sometime this quarter. Since the end of this quarter is around Christmastime, we prefer to think of ME2 as a Christmas present for Marcellus/Utica drillers.
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Kinder Morgan Cancels UMTP – Utica Marcellus Texas Pipeline

Once again it seems environmentalists in Kentucky have won–stopping yet another NGL (natural gas liquids) pipeline. On Wednesday Kinder Morgan, one of (perhaps the) largest pipeline companies in North America, announced it is canceling plans to convert part of its Tennessee Gas Pipeline (TGP) that currently flows natural gas from the Gulf Coast to the northeast, to reverse the pipeline and flow natural gas liquids (NGLs) from the Marcellus/Utica region to the Gulf Coast. The project, called Utica Marcellus Texas Pipeline (UMTP), would have cost $4 billion. Instead, Kinder says it will still seek to reverse a big portion of TGP, but will instead flow M-U natgas south, instead of NGLs.
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