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MarkWest/MPLX Considering Alkylate Facility for Appalachia Butane

MarkWest Energy Partners LP and Marathon Petroleum Corp.'s (MPC) master limited partnership MPLX LP, which merged in December, said talks are underway with Appalachian producers about building an alkylate facility somewhere in Ohio or Pennsylvania.

If it were built, the project would be the first of its kind in the basin, upgrading butane produced in the Marcellus and Utica shales into alkylate, which is used as a blending component for cleaner-burning gasoline, said MarkWest’s Scott Garner, vice president of corporate development. He announced the plans at an industry conference in Pittsburgh on Wednesday.

Alkylate, Garner said, is expected to become essential in gasoline blending as refineries nationwide are facing stricter federal and state emissions standards. The United States still imports about 500,000 b/d of blending components, he said. The facility would produce the alkylate for refineries in the Northeast, Midwest and on the Gulf Coast.

When it was announced last year, the MarkWest, MPC merger was plugged as a way to improve onshore opportunities (see Shale DailyDec. 1, 2015). The alkylate project is among others prompted by the merger. The companies plan to build out more Utica gathering infrastructure, processing and fractionation capacity and existing pipelines serving the basin. MarkWest processes about three-quarters of Appalachian rich-gas production, Garner said.

At this point, he added, the company is only considering constructing the facility. But prior to the merger, the companies separately had been considering the need to build a plant to help meet forecasted demand for the blendstock.

Seaport Global Securities’ Sunil Sibal, senior infrastructure analyst, said Wednesday during a presentation at the conference that his firm expects more butane to be absorbed by refineries for use in gasoline blending as emission standards become more stringent.

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