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Newly Formed Artemis Liquids Looking to Move More LPG From Appalachia

A newly formed company is seeking commitments to get more propane and butane from the Appalachian Basin to a terminal facility it would construct on the Delaware River in New Jersey that would allow producers more access to overseas markets at a lower cost.

Artemis Liquids LLC announced a non-binding open season last week for NJ Market ConX, a rail and terminal project that it says would offer a more attractive alternative for producers currently sending the natural gas liquids (NGL) to the Gulf Coast.

"Railing a short distance to the East Coast will offer producers a cheaper option resulting in higher netbacks while allowing them the ability to sell into domestic markets during peak season," said Artemis managing partner Geof Storey.

NJ Market ConX would be capable of moving 50,000-75,000 b/d of liquified petroleum gas (LPG) on unit trains of 80-100 cars from fractionators in the Marcellus and Utica shales to a terminal on the Delaware River, where onsite storage could hold up to 750,000 bbl and allow sales into the very large gas carrier waterborne market. Artemis said this would allow producers access to premium international prices for their liquids that are above the Mt. Belvieu spot price.

The company would construct a rail terminal with unloading stations for pressurized LPG storage. Pumping facilities would deliver the LPG to dehydration and refrigeration units for cryogenic storage ahead of delivery to marine and ship loading facilities. Artemis said it has already started the permitting process for the facility. Over the next 18 months, the company said it plans to work on contracts with producers for capacity, environmental work, permitting and engineering work.

Construction is expected to begin in mid-2017 with a tentative in-service date set for late 2018. Non-binding bids are due on April 7. After a non-disclosure sheet is signed, Artemis said it would provide bidders with a detailed term sheet that includes rates for the project.

The project comes at a time when operators in the basin are increasingly focused on dry natural gas production as a result of the commodities downturn. But more liquids takeaway remains a top priority.

Sunoco Logistics Partners LP's Mariner East 2 pipeline has been delayed until next year as the pipeline awaits its permits and faces a number of legal challenges (see Shale DailyFeb. 26). Other pipeline projects to carry NGLs out of the basin, such as Williams and Boardwalk Pipeline Partners LP's Bluegrass pipeline, have been canceled altogether (see Shale DailyApril 28, 2014). And other projects under development, such as Kinder Morgan Inc.'s Utica Marcellus Texas Pipeline are still years away from full-service (see Daily GPIJune 17, 2015).

Artemis is backed by the private equity firm Apollo Global Management LLC.  In addition to Storey, Deirdre McCaffrey is also managing the company. The duo has experience in energy asset development and operations, having worked on similar projects including the Pine Prairie Energy Center and Tres Palacios Gas Storage on the Gulf Coast, among others.

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