NGL Pipelines Now on the Way As Shale Revolution Continues!

Jim Willis on NGL Pipelines
Editor & Publisher, Marcellus Drilling News (MDN)

[Editor’s Note: Three NGL pipelines now in the works will make a big difference in the ability of the industry to move Marcellus-Utica shale gas products to the outside world.]

We’re always jazzed when we unearth information related to the Marcellus/Utica nobody else has yet discovered or highlighted. We think we’ve found something interesting related to a recently updated spreadsheet maintained by the U.S. Energy Information Administration (EIA). It is about NGL delivering pipelines.

On Friday the EIA published a post to trumpet the news that 19 “liquids” pipeline projects are “moving toward completion in 2021.” In reviewing the list we discovered two projects related to the M-U in 2021, and a third M-U project coming in 2022. All three have an impact on the ability of M-U drillers to move NGL’s out of our region to higher-paying markets.

We’ll begin with the Today in Energy post by EIA on Friday by Jim O’Sullivan that first put us onto this NGL pipeline thread:

So far in 2021, 2 petroleum liquids pipeline projects have been completed, and 17 more projects have been announced or are currently under construction, according to updated data in our Liquids Pipeline Projects Database. That total includes 12 crude oil projects, 6 hydrocarbon gas liquids (HGLs) projects, and 1 petroleum product project. Of the 19 projects, 10 projects are new pipelines, 7 projects are expansions or extensions of existing systems, and 2 projects are conversions of the commodity carried on the pipeline.

In 2020, 24 petroleum liquids pipeline projects were completed. That total includes 11 crude oil projects, 12 HGL projects, and 1 petroleum product project. Of the 24 projects, 11 projects were new pipelines, 11 projects were expansions of existing systems, 1 project was a conversion of the commodity carried on the pipeline, and 1 project was a combination of new and existing pipelines.

Our Liquids Pipeline Projects Database documents more than 250 current, future, and past liquids pipeline projects in the United States. These pipelines carry crude oil, HGLs, and petroleum products—which include gasoline, diesel, jet fuel, and other refinery products. This database includes projects that date back to 2010. Our database contains project types, start dates, capacity, mileage, geographic information, and project status. We track expanded, reversed, converted, and new pipeline projects. Not all pipelines are independent projects. Some projects are connected to each other and carry the same liquid to its final destination. As a result, simply adding together the capacity of all projects would result in overestimating or double-counting the ability to deliver to customers.

The Liquids Pipeline Projects Database complements our natural gas pipeline projects table. We update our Liquids Pipeline Projects Database based on the best available information from pipeline company websites, trade press reports, and government documents, such as U.S. Department of State permits for border crossings. We release updates to the database twice each year: in the late spring and the fall. The data reflect reported plans. They are not a forecast and do not reflect our assumptions on the likelihood or timing of project completion.

We clicked to view the “database” (actually a spreadsheet) maintained by EIA for liquids pipeline projects. We converted the EIA Microsoft Excel file into an online Google Sheets file, which you can view for yourself here.

We re-sorted the sheet by year and discovered three NGL-related projects (two in 2021, one in 2022) that will materially affect sales of M-U natural gas liquids. All three project names are familiar to us and to anyone reading MDN for any length of time. However, we knew nothing of one of the three projects until today, and we had long forgotten about another.

Revolution System

First up on the list is one of the projects completely new to us, or rather this aspect of an existing project is completely new. We’ve been telling you for the past two-and-a-half years about Energy Transfer’s Revolution Pipeline, a 24-inch natural gas gathering pipeline that runs through Bulter, Beaver, Allegheny, and Washington counties. It exploded in September 2018 just as it went into service. Although it finally went back into service in March of this year, ET is still trying to finish up final work on the fixed pipeline.

Tucked into EIA’s liquids pipeline spreadsheet is an entry for the Revolution System (i.e. Revolution Pipeline) stating that in Q1 of this year Revolution would build a 12-inch, 15-mile y-grade NGL pipeline from the Revolution Cryogenic plant south to a storage and an injection site–all located within Washington County, PA. The entry says the project is already completed! How did this not generate all sorts of pushback by the radicals on the left?

Y-grade means the Revolution Cryogenic plant separates out NGLs from methane, sending methane to interstate pipelines, and leaving a mix of NGLs (ethane, butane, propane, etc.) all jumbled together in one stream, or y-grade. That mix needs to be further processed to separate the NGLs. MarkWest Energy operates a facility in Washington County, PA that does NGL processing, connecting to ET’s Mariner East pipeline system to send the different components (mostly ethane and propane) onward to Philly and Marcus Hook. Our guess (we don’t have 100% verification) is that the new Revolution y-grade pipe connects to MarkWest and from there flows into ET’s own ME2 pipelines.

Again, we’re stunned this short but important pipeline got built completely under the radar over the past several months.

Mariner East 2 Pipeline (Bypass)

Speaking of ME2, the project has one final bit of work to do on the ME2X pipeline before all three ME2 pipelines are fully complete and up and running at full capacity. The final bit is a short bypass around Marsh Creek State Park. According to the EIA spreadsheet, the ME2 Bypass project needs final permits (from the PA Dept. of Environmental Protection) before it can finish work. Tentatively the work should be done in Q3 of this year. This was the one project we were fully aware of.

Appalachia to Texas Express (ATEX) expansion

Looking at 2022, we noticed a project that we had forgotten about–an expansion of ATEX to the Gulf Coast. In October 2019, Enterprise Products Partners, the builder and operator of the ATEX ethane pipeline, committed to expanding the capacity along the pipeline.

ATEX was completed and began to flow 125,000 barrels per day of Marcellus/Utica ethane (a NGL) to the Gulf Coast in 2013. The pipeline starts in Washington County, PA, runs through West Virginia, and then all the way across Ohio. Some 261 miles of new pipeline was laid through Ohio, all the way to Seymour, Indiana where it connects to an existing Enterprise pipeline that runs to the Gulf Coast where the ethane gets used in cracker plants. The entire length of what is now called the ATEX is 1,192 miles long.

Enterprise plans to improve and modify the existing infrastructure (no new pipeline) to expand capacity along ATEX by an extra 45,000 barrels per day of ethane. The project is supposed to be completed sometime in Q2 of next year.

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