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Shell's Ethane Pipeline for Pennsylvania Cracker Slated for 2020 Commissioning

Shell Pipeline Company LP now expects to begin construction on its Falcon Ethane Pipeline System in 2019 and be finished with it by the end of the year, a company executive overseeing the project told an industry conference in Pittsburgh on Tuesday.

The Falcon Ethane system would feed Shell Chemical Appalachia LLC’s multi-billion dollar cracker that is currently under construction. Shell Pipeline first began acquiring rights-of-way for the project about two years ago and construction was initially expected to begin this year.

Major Projects Manager Doug Scott said that while preliminary studies on the system began in 2016 at about the time Shell made a final investment decision to move forward with the cracker, the route wasn’t actually finalized until 2017, when permit applications were submitted to various regulatory agencies later in the year.

“2018 has been a very busy year,” Scott said during remarks he made before the Northeast U.S. Petrochemical Construction conference. “We completed detailed design, which allowed us to procure all of our major equipment, all of the pipe, and we anticipate getting our permits in the next few months, which will allow us to do right-of-way preparation in the fourth quarter.”

The 97.5 mile, two-leg system would run south in western Pennsylvania to pick-up ethane from MarkWest Energy Partners LP’s Houston Processing and Fractionation facility in Washington County. It would also stretch west into Ohio, where it would pick up ethane produced in that state and in West Virginia at MarkWest’s Cadiz Complex in Harrison County, OH, and from Utica East Ohio’s nearby Harrison Hub fractionation plant in Scio, OH. Scott added that the pipeline would mostly be 12-inch diameter.

It would have a capacity of about 100,000 b/d, which would match the cracker that’s being built in Beaver County, about 30 miles northwest of Pittsburgh. Another Shell executive spoke at the conference on Monday and said the cracker is on track, with start-up set for the early 2020s.

Scott said the Falcon Ethane system should be finished by the end of 2019 and ready for commissioning in 1Q2020. There would be no pumps or compressors on the lines, as the source points have enough pressure to transport ethane all the way to what Shell calls “the junction” where the two-leg system meets near the cracker plant, he said. Scott also boasted that the company did not have to resort to using eminent domain and was able to secure all of its easements in private negotiations with corporations and landowners.

Once completed, Scott said the Falcon Ethane system would be monitored from a control center in Houston, with a five-person staff in Pennsylvania to help with those operations and the frequent ground and aerial surveys that will be conducted as part of ongoing monitoring.

Ten natural gas producers have signed 10-20 year ethane supply agreements to anchor shell’s cracker. Ethane is a major part of the gas stream in Appalachia, accounting for a large share of the typical barrel of natural gas liquids there. As dry gas takeaway continues to grow, and as more outlets come online for NGLs such as Shell’s cracker, those volumes continue to rise.

Glenn Koch, vice president of engineering and construction at Williams, who oversees expansion projects for the midstreamer in the Northeast, said his firm expects Appalachian NGLs to continue increasing in the coming years. Williams anticipates that NGL production in the basin will go from about 535,000 b/d last year to 840,000 b/d in 2022.  

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