Dominion Resources has formed new unit Dominion NGL Pipelines, which is soliciting interest in a new pipeline that would carry ethane from the tailgate of a new processing plant being built by Dominion near Natrium, WV, to an interconnect with Enterprise Products Partners LP’s planned Appalachia to Texas Express (Atex Express) pipeline near Follansbee, WV.
The pipeline would transport about 27,000 b/d. Dominion NGL is holding a nonbinding open season through Aug. 17. Dominion NGL said the 58-mile pipeline could be available for service after Jan. 1, 2014 or when Enterprise begins service on Atex Express.
Ethane could be transported to other destinations along the proposed pipeline route depending upon shipper interest. “The pipeline will require a significant capital investment. Therefore, Dominion is seeking long-term commitments from shippers needed to support the investment,” the company said.
While the pipeline would not start moving ethane until at least the beginning of 2014, Dominion NGL said the project could be finished by around May 1, 2013. Before delivering ethane to Atex Express, Dominion said it would use the pipeline to carry propane. During that interim period, propane transportation service will be made available to all potential shippers on a common carrier basis pursuant to a tariff that will be filed with the Federal Energy Regulatory Commission, the company said.
“Propane will be sold into a variety of markets,” Dominion spokesman Dan Donovan told NGI’s Shale Daily. “Initially it will be sold into the local truck market, principally propane retailers, and to any market we can reach by rail in North America. Beginning next spring, we will be able to sell propane to all markets on Enterprise’s TEPPCO (Texas Eastern Propane Pipeline Co.). Ultimately, we will be able to load propane onto barges and sell it to any markets on the Ohio and/or Mississippi rivers. Other outlets are expected to emerge over time and we will look to sell propane on them also.”
A propane pipeline was part of the original design for the Natrium plant. “In the last few months we decided to convert that line to ethane service once Atex goes into service,” Donovan said. “This provides us a critical pipeline link for ethane while the liquids market in the region, especially ethane, develops more fully.”
Donovan said the pipeline could eventually be expanded to carry about 50,000 b/d of ethane “fairly easily” with further expansions also possible.
At the beginning of Natrium plant and pipeline operations, all ethane recovered from the gas stream will be delivered to Atex or reinjected into the residue gas stream because there are yet no local markets for ethane, Donovan said. “We are working with several companies that are interested in building an ethane cracker in the region,” he said. “Ultimately, we expect to deliver ethane to one or more crackers also.”
The 1,230-mile Atex Express would deliver ethane from the Marcellus/Utica Shale areas of Pennsylvania, West Virginia and Ohio to the U.S. Gulf Coast. Early this year Enterprise said it would proceed with the project (see Shale Daily, Jan. 5). Late last year Chesapeake Energy Corp. agreed to be the pipeline’s anchor customer (see Shale Daily, Nov. 3, 2011).
About 70% of the proposed Atex Express route is expected to utilize existing pipeline. Atex Express is expected to enter service during the first quarter of 2014.
Dominion’s gas processing and fractionation plant being constructed in Natrium is expected to be completed by the end of this year (see Shale Daily, Aug. 8, 2011).
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