Sunoco Logistics announces $2.5B pipeline project

Sunoco Logistics Partners L.P. announced Thursday an enormous $2.5 billion pipeline project that will quadruple the volume of Marcellus Shale natural gas liquids moving through the Philadelphia area.

The Philadelphia company said it will move forward with its Mariner East 2 project, the second phase of a broader plan to move materials like propane, butane and ethane from shale-gas regions in Appalachia to Sunoco Logistics' Marcus Hook Industrial Complex southwest of Philadelphia.

The Mariner East 2 venture envisions a brand new pipeline to follow the route of its first Mariner East project, a 300-mile repurposed an 8-inch pipeline crossing Pennsylvania to carry liquids to Marcus Hook.

The first Mariner East project, which Sunoco says will begin delivering propane by year's end, has aroused opposition in several Chester County communities where the pipeline passes.

Mariner East 2 is expected to deliver an initial capacity of 275,000 barrels per day of natural gas liquids (NGL) to Marcus Hook. Combined with Mariner East 1 capacity of 70,000 barrels per day, the two pipelines will provide 345,000 barrels per day of total NGL capacity from the shale regions. A barrel is 42 gallons.

That means the Marcus Hook complex will handling double the volumes of fuel it processed during its previous lifetime as an oil refinery. The former Sunoco refinery, which had a daily capacity of 175,000 barrels of crude oil, closed in 2012 and has been largely dismantled to make way for its new life as an Marcellus energy hub.

For now, most of the ethane, propane and butane materials delivered to Marcus Hook will be loaded on ships in Marcus Hook and exported. Some propane will be sold to local markets or shipped by barge to regional Northeast markets.

Business and industrial leaders envision the Mariner East projects will boost the expansion of other heavy industries in the region. Natural gas liquids are a raw material in the production of petrochemicals.

"This vital energy project will provide a comprehensive solution in the region to transport, store and process NGLs from the Marcellus and Utica Shales, and will provide the foundation for the continuing rebirth of the local manufacturing sector," said Michael J. Hennigan, Sunoco Logistics' chief executive.

"The project also enables the continuing development of the Marcus Hook Industrial Complex, as we convert a former refinery site into a world-class natural gas liquids hub in southeastern Pennsylvania," he said.

In its announcement Thursday, Sunoco Logistics said it is also "actively developing" the addition of an natural gas liquids manufacturing complex at Marcus Hook property, including a propane dehydrogenation to manufacture propylene.

The company offered no details on the propylene project, but one potential customer is located adjacent to the Marcus Hook property. Braskem America operates a polypropylene plant that uses propylene as its primary raw material. Polypropylene is type of plastic with broad uses.

The Mariner East 2 pipeline will be about 350 miles long, originating at intake points from producers in Eastern Ohio, West Virginia and Western Pennsylvania, with Scio, Ohio, being the westernmost origin.

Source: Philly.com