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Mariner East Pipe Fulfills Promise as Southeast Pa. Economic Engine

As we told you last week, Energy Transfer, during its first quarter update, spoke about the now-completed Mariner East pipeline system that flows NGLs, including ethane, propane, and butane, from eastern Ohio and southwestern Pennsylvania all the way to southeastern PA and the Marcus Hook terminal (see Energy Transfer 1Q: ME Pipe Done; Possible Marcus Hook Expansion). Here’s two pieces of information we picked up in a new article in the Philly Inquirer: (1) The original ME1 Pipeline (an older pipeline repurposed to use for NGLs) is being converted back into flowing refined fuels from Midwestern refineries to the Philadelphia market, and (2) a temporary workaround pipeline in the Philly area used for ME was taken out of service back in February.
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Former NJ DuPont Dynamite Factory Near Philly Exporting NGLs

propane exports

New (for us) information has us laughing and snickering at THE Delaware Riverkeeper, Food & Water Watch, and other leftist “environmental” groups who have opposed building a new LNG export dock on the Delaware River. We’ve told you, for years, about a plan to build an LNG liquefaction plant in land-locked northeastern Pennsylvania, in Wyalusing, Bradford County (see Big News! Marcellus LNG Export Plant Coming to Landlocked NEPA). New Fortress Energy (NFE) planned to build the plant and to use both trucks and (more importantly) rail cars to ship chilled LNG to an export terminal (a dock in the river) in the Gibbstown area of Greenwich Township, located in Gloucester County, NJ. Guess what? NGLs already ship from the Gibbstown facility!
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New Ohio LNG Rail Terminal Fed by Marcellus/Utica Propane

Sycamore, Ohio (credit: Wikipedia)

We’ve often said it before: We love a good railroad story. And here’s one for you… NGL Supply Co. Ltd. recently opened a new propane rail terminal in Sycamore (Wyandot County), Ohio. The 180,000-gallon Sycamore terminal has the capability to offload eight rail cars at 1,500 gallons per minute (gpm). The best part? The terminal is supplied by rail cars primarily from the Marcellus Shale region. Most if not all of the molecules flowing through the terminal come from the Marcellus/Utica.
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WV Senator Capito Tells WV-GO Biden Infra Bill has $$ for NGL Hub

U.S. Senator from West Virginia Shelley Moore Capito “Zoomed” in to address the Gas and Oil Association of West Virginia’s (GO-WV) annual winter meeting last week. She talked about the Biden infrastructure bill, which she supported, and Biden’s so-called Build Back Better bill, which she does not support. As part of her comments, Capito mentioned the $1.2 trillion infrastructure bill includes money for “an Appalachian ethane/hydrogen storage hub.” Wow! We thought that project was long dead.
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Shell Cracker Set to Come Online in 2022 – More Coming Attractions

Our friends at NGI (Natural Gas Intelligence) are running an excellent series providing expert forecasts for the global natural gas and oil markets in 2022. The latest installment interviews several experts about the prospects for the Marcellus/Utica. With the Shell ethane cracker plant coming online sometime this year, the prospects for NGL sales in the M-U have picked up. Also in the discussion: capping Pennsylvania’s orphaned wells, drilling in the Wayne National Forest, and the Mountain Valley Pipeline coming online.
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M-U NGL Cryogenic Plant in Southeast Ohio Getting an Upgrade

BCCK Holding Company (BCCK) has been granted a contract to upgrade a cryogenic gas processing plant in the Marcellus/Utica, in southeastern Ohio. The name of the customer was not disclosed but we’re guessing it is MarkWest Energy (now MPLX). BCCK says it has developed a simple and effective modification to improve the existing cryogenic plant design and equipment with the aim of increasing propane recovery.
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What Will Winter and 2022 Bring for NGL Production & Prices?

According to the experts at RBN Energy, “If there was ever a year that proves NGLs march to the beat of a different drummer, 2021 was it.” Production of NGLs went *up* during the pandemic, not down. Prices have been up, down, and all around. Like all oil and gas markets (markets of any kind, really), there is no one, specific factor or reason why NGL production and prices are doing what they are doing. It is a complex soup of factors that affect the NGL market–a market that’s increasingly vital for Marcellus/Utica producers.
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Antis File Lawsuit Challenging Ohio NGL/H2 Storage Hub Permits

Earlier this month MDN exclusively broke the news that earlier this year (slipping under the radar) the Ohio Department of Natural Resources (ODNR) issued permits to Powhatan Salt Company/Mountaineer NGL Storage for three planned solution mining wells in Monroe County (see OH Issues Permits to Build Salt Caverns for Mountaineer NGL/H2 Storage). The three salt caverns will store NGLs (natural gas liquids, mainly ethane) to potentially be used by ethane crackers including the Shell cracker near Pittsburgh and potentially a second ethane cracker proposed by PTT Global Chemical in Belmont County. The salt caverns can also be used to store hydrogen (H2). Virulent anti-fossil fuel groups filed a lawsuit on Tuesday challenging the ODNR permits.
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U.S. Propane Heading for “Armageddon” with High Prices, Shortages

Three weeks ago MDN told you that propane prices at both the wholesale and retail level were going through the roof (see Propane Prices Through the Roof – Global Demand Up, Supply Down). At that time wholesale prices at Mont Belvieu, Texas, the main U.S. hydrocarbon gas liquids (HGL) hub, were averaging $1.33 per gallon. It’s only gotten worse. The most recent numbers show wholesale propane prices averaging $1.63 per gallon. Edgar Ang, an IHS Markit analyst, says the setup looks like it could be “propane-market armageddon” and that we could see shortages before the end of winter.
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OH Issues Permits to Build Salt Caverns for Mountaineer NGL/H2 Storage

On August 30, the Ohio Department of Natural Resources (ODNR) issued permits to Powhatan Salt Company/Mountaineer NGL Storage for three planned solution mining wells in Monroe County. The three salt caverns will store NGLs (natural gas liquids, mainly ethane) to potentially be used by ethane crackers including the Shell cracker near Pittsburgh and potentially a second ethane cracker proposed by PTT Global Chemical in Belmont County. The salt caverns can also be used to store hydrogen (H2).
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Propane Prices Through the Roof – Global Demand Up, Supply Down

According to the U.S. Energy Information Administration, high global demand and low global supply are contributing to the rapid increase in U.S. propane spot prices. At one point last year, propane spot prices averaged just above $0.20 per gallon. Right now it’s averaging $1.33 per gallon!
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PHMSA Issues Warning Letter to Shell re Falcon Ethane Pipeline

The federal Pipeline and Hazardous Materials Safety Administration (PHMSA) recently issued a “warning letter” to Shell concerning the company’s ethane pipeline, called the Falcon Pipeline. PHMSA claims the pipeline committed two “probable violations” by failing to place pipeline sections at a construction site in Beaver County on protective padding. PHMSA told Shell to fix it, or else.
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Antis Pack DOE Dog & Pony Show Hearing to Bash M-U Petchem Industry

Have you ever noticed how politicians like to “study” things? Why is that? We suppose the results of all those studies gives them political cover to make unpopular votes on key issues. The U.S. Department of Energy’s Office of Fossil Energy and Carbon Management is in the process of conducting a study on the prospects for a petrochemical industry in the Marcellus/Utica. As part of that study, DOE held an online/virtual hearing yesterday to elicit comments on the environmental, health and community impacts of the petrochemical industry from ethane crackers and pipelines. In what appears to be a put-up job, a dog and pony show, the hearing was packed with radical anti-fossil fuel nuts who bashed away at the shale industry.
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M-U Drillers Rake in the Cash in 2Q from Higher NGL Prices

During the second quarter (May through June), ten of the largest oil and gas producers covered by S&P Global Market Intelligence saw their NGL (natural gas liquids) revenues grow substantially from the same period a year ago. Those ten companies, half of them drillers in the Marcellus/Utica region, saw NGL prices increase from 104% to as high as 261%. The extra money from NGLs made what turned out to be a down quarter financial-wise (because of bad bets on hedges) better than it would have otherwise been.
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Ethane, Once a Waste Product/Expense, Now a Profit Maker

When drillers for natural gas sink a hole and methane (CH4) begins to come out of the ground, a number of other hydrocarbons come out of the ground along with it–at least in “wet gas” areas. Those other hydrocarbons include ethane (C2H6). Ethane production in some M-U wells goes as high as 6% or more of the hydrocarbons coming out. For years ethane has been a waste product, something drillers pay to dispose of–typically by “rejecting” it and slipping it into the methane stream. Increasingly ethane, which is now trading at its highest price in two-and-a-half years, has become a profit center. Why? Because it’s used to make plastics.
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PA PUC Proposes New Regs for Pipelines – Landmen Must be Licensed

More than two years after eliciting comments on new regulations for hazardous liquid pipelines in Pennsylvania, the state Public Utility Commission (PUC) unveiled proposed rules that will apply to intrastate pipelines transporting gasoline, petroleum, crude oil, and natural gas liquids like ethane. We have a copy of the PUC’s proposal below. The new regulations would apply to the Mariner East (ME) system and Buckeye Partners’ Laurel Pipeline, which carries petroleum across the state. Landmen beware: Among the changes proposed by the PUC is a requirement that you must be licensed if you work on a liquids pipeline project.
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