Jan 30, 2015 4 min read

Preparations for a second leg of a cross-state pipeline transporting Marcellus and Utica Shale wet gas from the region is well under way, a Sunoco Logistics spokesman said Friday.

Joe McGinn, senior manager for public affairs at Philadelphia-based Sunoco Logistics, told about 200 members of the Washington County Chamber of Commerce that the company met with area landowners earlier this month to discuss the proposed path of the Mariner East 2 Pipeline, which will extend west from the Mark West fractionation plant in Chartiers Township into the West Virginia panhandle and eastern Ohio.

“We’re up and going and spending money to get this built,” McGinn said during remarks at the chamber’s monthly breakfast meeting at the Hilton Garden Inn, Southpointe.

The money, McGinn explained, is of the serious kind – a $3 billion investment primarily in Pennsylvania – to move natural gas liquids such as ethane, propane and butane to refineries in Marcus Hook in Delaware County.

The infrastructure itself is equally serious, he explained, in that it will complement the original Mariner East Pipeline referred to Mariner East 1, in helping natural gas producers in the region move more product to markets, a situation that until now has hamstrung them from moving much of the huge surplus of production coming from their wells.

“In terms of this region, this part of the Marcellus is blessed with natural gas liquids, but no infrastructure,” McGinn said. “If you were making cars here, you would run out of space on the factory floor.”

McGinn said Mariner East 1 is now moving propane to refineries.

With the construction of ME2, for which Sunoco Logistics is in the process of acquiring land and rights of way, more of Marcellus and Utica production of NGLs will find its way to Marcus Hook, he said. While the company has no construction start date at this time, it hopes to complete the ME2 pipeline by the end of 2016.

While the western end of ME2 will cross Natrium, W.Va., and terminate at Scio in Ohio, the new project will extend across Pennsylvania alongside ME1.

“We want to parallel the right of way and easements back across Pennsylvania” next to ME1, he said.

The dual pipeline strategy will have significant economic impact for both sides of Pennsylvania, as well as some strategic spots in between, McGinn noted.

He said NGLs produced in the Marcellus/Utica region here are expected to reach more than 800,000 barrels per day by 2016.

While producers are already moving some of their ethane north to Canada and west and south to the Gulf Coast, McGinn said much of the ethane could be sold here, if Shell decides to build its proposed ethane cracker plant in Beaver County.

Much like an interstate highway, Sunoco’s pipeline is expanding its use of access ramps, McGinn said, noting that the initial ramp was for the Mark West fractionation plant, with two more to be added in Ohio and a third in West Virginia, with production from all of those areas heading back across Pennsylvania.

“The biggest thing is providing that market with NGLs,” he said, stating that the goal of the new project is to bring 70,000 barrels per day of propane and ethane to Marcus Hook.

Even with current depressed prices, propane is a high-value product, McGinn said, noting about 200,000 Pennsylvania homes use it for heating.

As part of the pipeline’s expanded design, Sunoco is adding several propane delivery points to reach home and commercial propane suppliers between Harrisburg and Philadelphia.

Beyond home heating, McGinn said, propane is also the feedstock for propylene, which is used to make polypropylene, which in turn, is used to make water bottles and is used in some clothing.

He said he knows of at least one company that is considering building a propane cracker in Marcus Hook to take advantage of the supply here.

Returning to the potential for natural gas products to be an economic game-changer in Pennsylvania, McGinn noted a major strategic marketing advantage if the delivery infrastructure continues its build-out.

“This part of the country is where the largest population is,” he said.