Sunoco blames permit delays for later Mariner East 2 pipeline start-up

Sunoco Logistics Partners LP said Thursday that it is pushing back next year’s start-up of the contentious Mariner East 2 pipeline to deal with unanticipated delays in obtaining permits from the Pennsylvania Department of Environmental Protection.

The 300-mile pipeline, which would deliver natural-gas liquids such as ethane and propane from the Marcellus Shale region to Sunoco’s Marcus Hook terminal, has aroused opposition from some adjoining property owners, as well as from environmental activists.

Michael J. Hennigan, chief executive of the Newtown Square company, told investment analysts during its third-quarter earnings call that the DEP was asking for more technical details about the pipeline, which crosses 17 counties.

“The detail involved in the Pa. DEP permit application has necessitated a longer-than-anticipated regulatory review process, but we are convinced that this project will be environmentally responsible and will be creating significant economic development in the commonwealth,” Hennigan said.

The 275,000 barrel-per-day pipeline, which would mostly follow along the existing Mariner East pipeline, was initially expected to be operational by the end of 2016. Sunoco Logistics previously delayed the start-up to the second quarter of 2017. Thursday’s delay pushes that back to the third quarter of 2017.

The permit delays are the latest disappointment to beset the $2.5 billion Mariner East project, which will deliver natural-gas liquids to Marcus Hook for export, or potentially for use in local petrochemical facilities.

The first Mariner East project, a repurposed pipeline that was set to deliver 70,000 barrels of liquids a day, has been limited to 50,000 barrels because of technical problems, Hennigan said. Modifications to the fuel-handling systems were completed in October, he said, and the pipeline should achieve its full potential soon.

The Mariner East project is considered one of the linchpins to developing local uses for production from the Marcellus and Utica shale formations. The natural-gas liquids are a raw material in petrochemical production.

Source: Philly.com