An El Paso Corp. subsidiary and Spectra Energy Corp. have executed a memorandum of understanding to jointly develop the proposed Marcellus Ethane Pipeline System (MEPS) project.
El Paso Midstream Group Inc. and Spectra each would own half of the MEPS and would jointly operate it.
The MEPS project, launched alone by El Paso in August (see Daily GPI, Aug. 10), would be designed to transport up to 60,000 b/d of ethane from fractionation plants in the Marcellus Shale production region to interconnect points with third-party ethane pipelines and storage facilities in the Gulf Coast area.
"We're continuing to talk with interested parties and reviewing destination points and other options," El Paso spokesman Richard Wheatley told NGI. "The next open season would be a binding one, with the timing of that to be determined."
MEPS would use both existing rights-of-way and infrastructure of Spectra's Texas Eastern pipeline system in Pennsylvania and Ohio, as well as portions of El Paso's Tennessee Gas Pipeline system from Ohio to the Gulf Coast.
"This is an exciting opportunity to bring together two of the leading pipeline infrastructure companies in the industry to provide an attractive alternative for producers in the growing Marcellus development," said Mark Leland, president, El Paso Midstream Group. "Our two organizations have been operating in the region for decades and together we look forward to providing additional resources to help meet our country's growing energy needs."
Spectra's Guy Buckley, group vice president, Corporate Development and Strategy, said the MEPS project would offer Marcellus producers "a cost-effective, long-term solution for moving their ethane production to multiple high-demand markets," and the project "provides the market with an attractive opportunity to access ethane supplies from this growing supply region. In addition, the combined footprints and resources of both companies further enhance the project's overall development, execution and market breadth."
The MEPS project, with a targeted in-service date of late 2013, primarily would use existing facilities, rights-of-way and utility corridors, which would minimize impacts to the environment and landowners and provide cost efficiencies and improved project timing.
New construction is to include about 200 miles of pipeline and compression facilities, as well as vaporization and liquefaction facilities.