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MarkWest: Bring On the Marcellus Ethane Projects

When it comes to ethane projects in the Marcellus Shale, MarkWest Energy Partners LP believes there is strength in numbers, the company said in a quarterly conference call on Tuesday.

"The more outlets for ethane out of the Marcellus and in the Utica, the better," MarkWest CEO Frank Semple said, calling ethane "an increasingly valuable commodity in the world markets."

Midstream operators are less concerned about competing projects and more concerned about staying ahead of developments in the numerous liquids-rich shale plays in the northeast, he said. That's why MarkWest and Sunoco Logistics Partners LP continue to move ahead on Mariner East, a plan to barge up to 50,000 b/d of ethane from Appalachian shales to the Gulf Coast petrochemical industry, despite a competing pipeline project aiming to serve the same function.

Enterprise Products Partners LP is nearing the end of an open season on a project to connect the Marcellus to the Gulf Coast using new and existing pipelines by early 2014, but already got a commitment from Chesapeake Energy Corp. to be the anchor shipper (see Shale Daily, Nov. 3).

"It really hasn't impacted Mariner East at all," Semple said about the Enterprise project.

Despite sharing a supply source and a market, Semple said Mariner East differs from the Enterprise project in that it can ship ethane overseas or to numerous Gulf Coast locations.

While Enterprise is still pursuing a pipeline project for now, the company wants to build a 550-mile header system to connect petrochemical facilities from Corpus Christi, TX, to Norco, LA, by late 2013, giving it expanded market options as well (see Shale Daily, Aug. 10).

MarkWest and Enterprise are also connected by infrastructure, Semple noted.

"We continue to work with our producer customers to support all Marcellus ethane transportation solutions, including the recently announced Enterprise pipeline project to the Gulf Coast, which would connect to our Houston, PA [ethane processing] facility," he said, referring to the MarkWest Liberty Midstream & Resources LLC processing and fractionation complex.

The Mariner East project recently got an unusual boost from the U.S. Congress when Sen. Pat Toomey and Rep. Pat Meehan, both Pennsylvania Republicans, amended legislation designed to clear the way for the America's Cup to include the project. Although dissimilar in most regards, the yacht race and the ethane project both need a waiver of the federal Jones Act that requires ships moving between domestic ports to be built, flagged and manned by Americans.

MarkWest and Sunoco recently announced a successful open season for their Mariner West project to pipe up to 50,000 b/d of Marcellus ethane from Houston, PA to Sarnia, ON (see Shale Daily, Sept. 8). That project, anchored by Range Resources Corp, is scheduled for July 2013.

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