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Marathon Provides Details on New Utica Pipeline

MPLX, the master limited partnership formed by Marathon Petroleum Corp. (MPC) last year to operate and acquire midstream assets, has plans for a new 49-mile pipeline that will carry crude oil, condensates and natural gas from the Utica Shale in Southeast Ohio to MPC's refinery in Canton, OH.

Currently, MPLX is evaluating right-of-way options for the $140 million Cornerstone Pipeline, as it will be called. Gary Peiffer, president of MPLX and executive vice president of MPC, discussed the new pipeline during an investor day presentation in New York on Wednesday, telling analysts that the company will focus more intently on its midstream business going forward.

Cornerstone will start at Markwest Energy Partners' cryogenic processing plant in Cadiz, OH, then head to M3 Midstream's fractionator in Scio, OH, and on to its cryogenic plant in nearby Leesville before it terminates at MPC's refinery in Canton. Peiffer said the line is expected to generate $20 million of EBITDA annually.

In all, MPC has about $2.2 billion planned for midstream growth projects through 2016 across the country. Earlier this year, the company said it would spend $300 million to prepare for rising production volumes by installing two condensate splitters at its Canton refinery and another in Catlettsburg, KY. (see Shale Daily,May 3). The splitter at its Canton facility will have a 25 million b/d capacity, while the other at its Catlettsburg facility will have a 35 million b/d capacity.

The splitters will operate as separate units and they will process condensate into a mix of gasoline and distillate products.

Based in Findlay, OH, MPC is the state’s biggest refiner and the nation's fourth largest . Peiffer said if Utica production outstrips the company’s processing capabilities, Cornerstone, which is expected to be in service by 2016, could serve as the "foundation for other organic projects" to ship excess condensate to western Ohio and Canada, where it is in demand as diluent to reduce the thickness of heavy Canadian crude bitumen.

The pipeline is yet another in a series of projects announced for Ohio this year. In September, the Columbus, OH-based law firm Benesch, Friedlander, Coplan & Arnoff said more than 133 pipeline projects were either planned or under development in the state.

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