Pipeline operators MarkWest Energy Partners LP (MWE) and Sunoco Logistics Partners L.P. (SXL) have decided to expand their ethane pipeline project. The companies – which teamed up in June last to build the ‘Mariner’ distribution system to transport ethane produced in the Marcellus Shale Basin to markets along the Gulf Coast – will now extend their partnership to allow for transportation of the gas to Canada.
Known as the ‘Mariner West,’ the proposed initiative is expected to begin service by the third quarter of 2012. It will ship up to 65,000 barrels of ethane per day to Sarnia, Ontario markets to support additional ethane production in the Marcellus region. The Mariner West Project is backed by producer demand and assurance from Sarnia industrial customers.
MarkWest, through its majority-owned joint venture MarkWest Liberty Midstream & Resources, has been working since late 2009 to construct and operate natural gas midstream services to support producers in the emerging Marcellus Shale play in western Pennsylvania and West Virginia.
MarkWest Liberty is a partnership between MarkWest Energy Partners and energy infrastructure private equity fund The Energy & Minerals Group. MarkWest has a 60% operated interest in the venture, while the remaining 40% is owned by The Energy & Minerals Group.
MarkWest runs a fractionalization complex in Houston, Pennsylvania, where gas gathered from Marcellus wells is processed and sent to storage facilities or pipelines.
For the Mariner West Project, MarkWest Liberty will be required to make minor adjustments to its processing facility to recover sufficient ethane (the primary constituent in ethylene, which is used to manufacture plastics) for delivery to Mariner West earlier than will be required for deliveries to Project Mariner, a pipeline and marine project that is scheduled to begin operations by mid-2013.
Additionally, MarkWest Liberty will build a 25-mile pipeline from its Houston complex to an interconnection with an existing Sunoco Logistics pipeline at Vanport, Pennsylvania. The ethane will then be piped from Vanport to markets in Sarnia.
Colorado-based MarkWest Energy and Philadelphia-based Sunoco Logistics – both master limited partnerships (“MLP”) with a Zacks #3 Rank (short-term Hold rating) – owns high-quality and a diverse portfolio of midstream assets.
MARKWEST EGY PT (MWE): Free Stock Analysis Report
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