Infrastructure Projects Connect Marcellus Shale To Ethane, NGL Markets
http://www.aogr.com/index.php/magazine/cover_story_archives/march_2011_cover_story1/
Posted on 11/03/2011 5:47:22 AM PDT by thackney
Enterprise Products Partners has scored the first major customer in its milestone plan to feed Gulf Coast industry with ethane from the burgeoning Northeast shale region, the pipeline company announced Wednesday.
Chesapeake Energy Corp., an Oklahoma City-based oil and natural gas drilling company, has signed a long-term contract with Enterprise to transport 75,000 barrels per day over the pipeline, which is slated to begin operation in early 2014 with a capacity of 125,000 barrels per day.
Enterprise announced in October its plan to build a 1,230-mile pipeline to the Gulf Coast petrochemical hub from the Marcellus and Utica shales in Pennsylvania, West Virginia and Ohio.
The network would be the first to move ethane, a natural gas liquid, from the Northeast to Enterprise’s storage complex in Mont Belvieu. From there, it would have access to every ethylene plant in the U.S., according to Enterprise.
Infrastructure need
Ethane is a feedstock for production of ethylene, the base material for many everyday plastic goods. In recent years, the Northeast has become a major hub for production of natural gas liquids, generating the need for pipelines and other infrastructure for the transportation and processing of fossil fuels there.
Chesapeake’s commitment moves the Enterprise pipeline plan much closer to realization. Enterprise will solicit customers through Nov. 10, then decide if there is enough interest to make the pipeline economic, executives said.
Enterprise has launched a number of expansion projects recently to capitalize on the surge in natural gas production from shale in the United States, helping the company to a rise in third-quarter earnings it reported Wednesday.
Quarterly profits up
Enterprise banked $480 million in profit, 55 cents per unit, during the three months ending Sept. 30, compared to $348 million, 18 cents per unit, during the same period in 2010.
Enterprise has planned $4.5 billion in energy infrastructure projects to come online from 2012 to 2014.
“Our businesses continue to benefit from the development of shale plays and the growing demand for NGLs as feedstocks by our petrochemical customers,” Enterprise President and CEO Michael Creel told analysts Wednesday.
“Our processing capacity is sold out with long-term commitments,” said Chief Operating Officer A. James Teague. “Frankly, our assets can’t get up and running soon enough.”
Shares of Enterprise Products Partners were up 23 cents to $44.16 Wednesday on the New York Stock Exchange.
More good news for my area!
I am PROUD to live in the Marcellus Shale play and marvel at the economic boom as a result!
Interesting, so ethane is a vital feedstock for plastics manufacture and comes mostly from natural gas and some from petroleum refining.
Is this the first example of a pipeline being built exclusively for the transport of ethane, I wonder?
Rather than transport it 1,230 miles it would be in Pennsylvania’s or Ohio’s interest to encourage chemical companies and refineries to locate in their states.
Jobs, jobs, jobs.
You would think someone with any knowledge of history, especially the birthplace of the oil industry in the world would want to do it different this time.
No, many ethane and associated liquids from natural gas already exist.
This is not a new industry, just a significant enlargment in the Ohio/Penn area.
Infrastructure Projects Connect Marcellus Shale To Ethane, NGL Markets
http://www.aogr.com/index.php/magazine/cover_story_archives/march_2011_cover_story1/
Tell me, didn’t the state of Pennsylvania block a pipeline to its east coast, forcing the movement of Marcellus output to Texas?
Not that I recall. I know there is talk of a pipeline to Baltimore for export of LNG from Marcellus that has some people upset.
All these hydrocarbon finds demonstrate how weak our pipeline infrastructure has become. Pennsylvania will be supplying NG to the east from North Carolina up to Canada.
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