Kinder Morgan Energy Partners LP has reached a long-term transportation agreement with NOVA Chemicals Corp. to transport ethane and ethane-propane mixtures from the Utica Shale through its previously announced Utica To Ontario Pipeline Access (UTOPIA) project.
The agreement will allow the 240-mile, 12-inch diameter pipeline to go forward, according to Don Lindley, Kinder's president of Natural Gas Liquids and Products Pipelines.
"We are pleased to partner with NOVA Chemicals to provide a long-term solution for moving ethane and ethane-propane mixtures out of the Utica Shale," he said in a statement. "Although we will continue to solicit additional volume commitments, this transportation agreement provides the necessary commitment level required to move forward with the project, and that is exciting news for the growing Ontario market."
Kinder spokeswoman Melissa Ruiz said the company has a confidentiality agreement that currently prohibits the disclosure of NOVA's volume commitment on Utopia. An open season is still underway for the pipeline, which would have an initial capacity of 50,000 b/d, that also precludes the company from commenting further on its plans until the open season is complete on Oct. 6.
Those interested in obtaining more detailed information about the open season can visit www.kindermorgan.com, or contact Vice President of Business Development Karen Kabin at 713-369-9268.
The project was first announced last December at a price of $300 million (see Shale Daily, Dec. 16, 2013), but additions to the line that will make it longer, and an increase in its diameter, have brought the price tag up to $500 million. Utopia will access fractionation facilities in Harrison County, OH, and feed Kinder Morgan's Cochin Pipeline near Riga, MI, a 1,900 mile, 12-inch diameter line. From there, it will flow eastward to the Ontario market.
"This project supports NOVA Chemicals' growth strategy, providing our Corunna, Ontario, facility with diversity of supply by accessing feedstock from new and existing producers in the growing Utica Shale basin, in addition to our current feedstock supply," said NOVA's President of Olefins and Feedstocks Grant Thomson.
At the time it was announced, a mid-2017 in-service date was anticipated for Utopia, pending Nova's execution of a definitive long-term agreement. With the agreement in place, Kinder said the project is now expected to be in-service by early 2018. The pipeline will also be expandable to more than 75,000 b/d.