Range to anchor Mariner East pipeline

Posted September 27, 2012

By Anya Litvak
Reporter- Pittsburgh Business Times

For the next 15 years, Range Resources will be the anchor shipper on the Mariner East pipeline which will carry natural gas liquids from southwestern Pennsylvania to Sunoco’s port at Marcus Hook near Philadelphia. From there, at least part of it will be shipped to Europe.

Mariner East is a joint venture between MarkWest Energy Partners, which processes Range’s wet gas at its Houston, Pa., complex, and Sunoco Logistics Partners, which owns the pipeline that will carry the liquids and the facilities at Marcus Hook.

Mariner East will have capacity to transport about 70,000 barrels per day of ethane and propane. About 40,000 of that will come from Range. The gas producer also announced that of that 40,000 barrels, 10,000 per day will go to INEOS AG, a Switzerland-based chemical company. Over time, that will increase to 20,000 barrels per day.

The propane is expected to start flowing in the first half of 2014, with ethane deliveries following a year later.

Range already has signed two other agreements to pipe its liquids — one with NOVA Chemicals for its Corunna Cracker in Sarnia, Ontario, and another with Enterprise Product Partners, whose ATEX pipeline will deliver ethane to the Gulf Coast. Chesapeake Energy is the anchor client for that pipeline project.

What this means for Range is that the company can drill more of its southwestern Pennsylvania acreage that falls in the wet gas portion of the Marcellus and receive 35 cents to 45 cents more per mcf when these liquids are taken out and sold separately.

In its second quarter earnings, the company said it was getting an average of $3.66 per mcf for its natural gas. Range estimates it has 1 million barrels of ethane in its acreage. Now, it has 30 percent of that under contract.