Pipeline would link Marcellus and Gulf

Posted January 4, 2012

By Christie Campbell

A Houston-based company, Enterprise Products Partners LP, announced Tuesday its plans to develop a 1,230-mile pipeline that will originate in Washington County and deliver ethane from the Marcellus Shale to the U.S. Gulf Coast.

The company said it had received sufficient transportation commitments to develop the Appalachia-to-Texas pipeline which will be known as the ATEX Express. It will deliver ethane production from the Marcellus and Utica shales of Pennsylvania, West Virginia and Ohio to the Gulf.

The pipeline will originate from the MarkWest Liberty Midstream processing plant in Chartiers Township. Once the ethane reaches the Gulf Coast, it will be converted to ethylene, which is used in the plastics industry.

"There's a strong need for ethane as feed stock as a natural gas liquid rather than crude oil derivative," Rick Rainey, an Enterprise spokesman said.

Many of the petrochemical plants along the coast are converting their plants to take advantage of the cheaper natural gas. The market currently is about 955,000 barrels per day and increasing. Rainey said the demand for ethane will continue to rise as shale reserves, once deemed uneconomical, continue to be tapped thanks to new technology.

Once completed, the ATEX Express will have the capacity to transport as many as 190,000 barrels per day from production areas to the partnership's storage and distribution assets in Texas. The committed shipper transportation rate will range between 14.5 cents per gallon and 15.5 cents per gallon.

The pipeline is expected to go into service in the first quarter of 2014, which means construction should start about a year prior to that. The first leg of the system will be construction of 595 miles of pipeline that will parallel an existing Enterprise line to Cape Girardeau, Mo. Rainey said the company is negotiating right-of-way agreements with landowners now.

The other portion of the project will involve reversing an existing 16-inch pipeline, which currently carries refined products such as diesel and jet fuel from Cape Girardeau to the Gulf Coast. By using that existing pipeline and following an existing right-of-way for the section to be built, the ATEX Express will reduce the environmental impact.

At the southern terminus of the ATEX Express pipeline, Enterprise will be constructing a 55-mile, 16-inch diameter pipeline to provide shippers with access to the partnership's natural gas liquids storage complex at Mont Belvieu, Texas, giving them direct or indirect access to every ethylene plant in the United States.

Enterprise had been working with producers for more than a year to find the best way to get ethane to markets and needed a long-term commitment to support the project, Rainey said. Shippers committed to a term of at least 15 years.

That, said Michael A. Creel, president and chief executive officer of Enterprise, reflects the long-term potential of shale development in the Appalachian region.

"The ATEX Express," he said, "will also serve as an economic driver for the country and the communities in which it will be located."

An estimated 4,000 jobs will be created from the project, including support services and local goods in addition to construction jobs.

Copyright Observer Publishing Co.