On Monday Energy Transfer, parent company of Sunoco Logistics Partners, announced a $200 million expansion of its Marcus Hook refinery located in Delaware County, PA, just outside Philadelphia. The upgrades include building a new warehouse and adding more propane and butane “chillers” (to keep the gases cold). The two-year project will employ some 1,200 union workers.
What a difference a decade makes! At the beginning of the decade, the Marcus Hook complex housed the Sunoco oil refinery, which closed in 2011. The complex was retooled and today it processes and stores NGLs, natural gas liquids, including ethane, propane and butane. The NGLs are transported to the refinery via the Mariner East pipelines–both 1 and 2. Later this year ME2X (a second Mariner East 2 pipeline) will be completed, flowing even more NGLs to Marcus Hook.
The volume hitting Marcus Hook these days already exceeds the volume of the old oil refinery back in its hay day. And it will only continue to grow. Southwestern PA, eastern OH, and the Northern Panhandle area of WV all produce loads of “wet gas”–natural gas with NGLs mixed in. It is from that gigantic pool from which Marcus Hook draws.
Once the NGLs hit Marcus Hook and get further processed (and stored), most of them are then loaded onto ships and exported to other countries.
All three sectors of the oil and gas industry are required for success: upstream (drilling lots of wells), midstream (ME pipelines to flow the NGLs), and downstream (the Marcus Hook refinery). An expansion of Marcus Hook is a positive sign that (a) there’s plenty of ongoing drilling, enough to keep feeding Marcus Hook, (b) the ME pipes which flow the NGLs, in partial service now, will soon be completed, and (c) the refinery itself, Marcus Hook, which cleans up the NGLs and loads them onto ships for export, is doing well financially.
From the Philadelphia Inquirer:
The parent company of Sunoco Pipeline LP on Monday announced $200 million in new projects in Delaware County that will employ as many as 1,200 trade workers over the next two years at the Marcus Hook Industrial Complex, terminus of Sunoco’s contentious Mariner East pipeline project.
Energy Transfer Partners (ETP), the Dallas parent of Sunoco Pipeline, said the construction projects would be scheduled under a recently signed agreement with the Philadelphia Building and Construction Trades Council, the umbrella organization that counts among its members more than 50 unions that work in the construction industry in the region.
Leaders of Steamfitters Local 420, Electricians Local 654, and Laborers Local 413 lauded the project at a ceremony Monday on the Marcus Hook waterfront.
Energy Transfer held the event as a counterweight to its recent clashes with prosecutors and anti-pipeline activists over construction of its pipelines in Delaware and Chester Counties, which has been fined repeatedly by regulators and become the object of criminal investigations.
The Marcus Hook complex, which housed a Sunoco oil refinery that shut down in 2011, was repurposed to store natural gas liquids like propane, produced in western Pennsylvania and Ohio, which are carried across the state in two Mariner East pipelines.
The complex now receives about 200,000 barrels of gas liquids a day, according to Hank Alexander, ETP’s senior vice president of business development, surpassing the amount of petroleum products that were processed daily during its previous life as a refinery.
While some of the propane and butane are sold into local markets, the complex is primarily a terminal for export to Europe. It’s designed to load large vessels such as the Corsair, a 738-foot gas liquids carrier that was berthed Monday, receiving a shipment of propane and butane.
Energy Transfer has invested $5 billion in building the pipelines and upgrading storage and processing facilities in Marcus Hook. New work will involve construction of a 56,000-square-foot warehouse, additional propane and butane chillers to keep the gases liquified, and rerouting the facility’s electrical supply.
Sunoco’s 350-mile Mariner East II pipeline, currently under construction, touches 17 counties across the state, and is a key link in the state’s effort to promote Pennsylvania shale-gas development. Its construction has been opposed by activists concerned about pipelines transporting highly volatile liquid fuel near homes, schools, and nursing homes. (1)
From the Delaware County Daily Times:
A diminished future for the Marcus Hook refinery at the start of the decade has turned around to a booming place by decade’s end.
Officials of Energy Transfer, owners of the Marcus Hook Industrial Complex that includes the refinery announced a two-year, $200 million project labor agreement Monday afternoon. The agreement will expand its facilities at the location with the help of 1,200 jobs through the Philadelphia Building Trades to include craftsmen of electricians, ironworkers, sheet metal workers and more.
The project will be split into two phases, the first starting this summer for $58 million. This will include construction of a 56,000 square foot warehouse, propane and butane chillers, the rerouting of the facility’s electrical supply and improvements to increase the operational efficiency of one of the storage caverns.
Following that, the addition of processing and storage capabilities for ethane, increase pumping capabilities on existing pipelines coming in and out of Marcus Hook, and more fractionation capabilities.
All of these projects will be brought online as volume increases on the Mariner East pipeline systems.
“This is a great moment for us as we’re standing here posed to take the next step into our future,” said Energy Transfer Executive Vice President of Engineering and Construction Kevin Smith. “The combination of increased NGLs (natural gas liquids) coming through Marcus Hook through our Mariner East pipelines and the labor force now in place because of the PLA allows us to move forward to create projects that create a dominant NGL hub.”
Smith added that the relationships with the trades organizations allow for the best skilled persons to come in and work, and “Energy Transfer works with the best.”
When asked about the growing Marcellus Shale industry, Energy Transfer Senior Vice President of Business Development Hank Alexander said Marcus Hook always was a good sight for the company, they just had to “get the molecules” (natural gas) down there.
“This now aligns everyone to the next phase. I can tell you that our producer customers and the production-driven economics that really push for Marcus Hook… made so much more sense than any other option out of this basin,” said Alexander.
A number of local labor leaders spoke to the safety they provide on their construction projects, include those in Marcus Hook.
“We’re proud, we’re extremely proud for the work that we do, especially down at this facility,” said Jim Snell, business manager for Steamfitters Local 420. “I truly want to commend Energy Transfer for its commitment local workers and the regional economy. This is an important partnership that demonstrates the value of skilled labor and proves that important relationships like this are good for the business.”
Bill Adams, assistant business manager of IBEW Local 654, said this will bring the employment of his unionized force from 40 to 300 at the site.
“Find me another project where employment increases seven times,” said Adams. “More importantly, the Philadelphia Building Trades has worked over 7 million man hours with perfect installations and zero accidents at this site. Large-scale infrastructure projects like this allows the IBEW, and other building trades workers, to put their skill set to use after spending thousands of hours in training.”
The investment is a counterpoint to when Sunoco Logisitics announced in late 2011 its intentions to close down the facility, cutting off hundreds of jobs in a very small community that is more industrial than residential. It has a great impact to the local tax base, said Marcus Hook Borough Manager Andrew Weldon, and on top of that is the generations, families of people who have worked at the facility over the decades.
“To be a part of this transformation of this facility into a thriving natural gas liquids hub and economic driver for this region has personally been an honor for me,” said Alexander. (2)
Finally, the Pennsylvania Energy Infrastructure Alliance, representing both business and labor groups, had this to say:
Today, members of the Philadelphia Building Trades publicly announced a two-year Project Labor Agreement for work on the Marcus Hook Industrial Complex totaling an estimated $200 million and is expected to employ up to 1,200 skilled labor tradesman. Among the trades that will benefit from this agreement are electricians, steamfitters, boilermakers, ironworkers, operating engineers, sheet metal workers, plumbers, and more.
The revitalization of the Marcus Hook Industrial Complex has been great for southeastern Pennsylvania. This announcement is further proof of this fact, through the commitment and partnership that Marcus Hook’s parent company, Energy Transfer is making with organized labor.
Marcus Hook includes terminalling and storage assets, with an approximate capacity of 3 million barrels of NGL’s on-site, which is key for the transport of these products regionally, domestically, and abroad. The Mariner East projects, are key to Marcus Hook because they are transport energy resources from the Utica and Marcellus Shale in Southwestern Pennsylvania to Marcus Hook. To ensure the safe construction and operation, Mariner East is also being built, utilizing union labor across Pennsylvania.
Kurt Knaus, Spokesperson for the Pennsylvania Energy Infrastructure Alliance, said:
“The announced $200 million agreement with the Philadelphia Building Trades is a tremendous commitment to the Marcus Hook community and beyond. Members of these trades are the best trained and highest skilled workers in their field and this agreement to ensure they will be working on upgrades to the facility ensures that the job will be done right the first time. Pennsylvania has a great opportunity with the development of the Marcellus Shale in Southwestern Pennsylvania, but to take full advantage of that opportunity, we need world class infrastructure like the Marcus Hook Industrial Complex and Mariner East to ensure that these products are safely transported to the end consumer.”
For nearly four years, the Pennsylvania Energy Infrastructure Alliance has advocated for the safe, responsible development of critical infrastructure. Pipelines are the safest, most efficient method of transporting oil and gas products. (3)
(1) Philadelphia (PA) Inquirer (Apr 29, 2019) – Sunoco’s $200 million expansion at Marcus Hook terminus in Delaware County to create 1,200 construction jobs
(2) Upper Darby Township (PA) Delaware County Daily Times (Apr 30, 2019) – Company pumps up $200M investment into former Sun refinery
(3) Pennsylvania Energy Infrastructure Alliance (Apr 29, 2019) – Statement: Philadelphia Building Trades Announce Labor Agreement at Marcus Hook Industrial Complex
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