Enterprise Products Partners LP is moving forward with an expansion of its Appalachia-to-Texas (ATEX) ethane pipeline after a successful open season landed the customer commitments needed to greenlight the project.
ATEX, a crucial outlet for ethane produced in the Marcellus and Utica shales since it first came online in 2014, is currently moving 145,000 b/d. The company, which launched an open season in August, is considering its options to expand the system by 45,000 b/d.
The success of the open season, said Senior Vice President Michael Hanley, “reflects the demand for additional, reliable ethane takeaway capacity for the Appalachian region of the country.” The expansion, he added, “would facilitate growing production from” Appalachia and “provide access to attractive markets on the Gulf Coast through Enterprise’s integrated midstream network.”
The 1,200 mile ATEX system transports ethane produced in Ohio, Pennsylvania and West Virginia to Enterprise’s natural gas liquids (NGL) storage complex in Mont Belvieu, TX. Enterprise said it would expand the system by modifying existing infrastructure. The new capacity is expected to be available by 2022.
Northeast NGL production lacks adequate connectivity with growth drivers on the Gulf Coast. ATEX is a primary pathway for Appalachian ethane to reach the Gulf, where a petrochemical buildout continues. While production from the Marcellus and Utica has continued to increase, a lack of liquids takeaway has, at times, been to blame for operators’ decisions to reject ethane into the gas stream.
The region continues to await more in-basin demand for ethane as an affiliate of Royal Dutch Shell plc works to complete a multi-billion dollar cracker in Western Pennsylvania, and similar facilities in the region and underground storage continue to move ahead slowly.
The expansion announcement also comes at a time when the Mariner East NGL system continues to face hurdles and is operating at partial capacity. Those pipelines are designed to move NGLs east for export from a terminal near Philadelphia.