Sunoco Logistics' Marcus Hook Terminal to Export First Ethane in February 2016
01.08.2016 - NEWS

January 8, 2016 [OPIS] – Sunoco Logistics’ Marcus Hook industrial complex south of Philadelphia along the Delaware River will be loading its first ethane cargo for exports in February, a company spokesman told OPIS on Thursday.

Sunoco Logistics expects to begin the first ethane supply movements to Marcus Hook from the Marcellus Shale region via the company’s Marine East 1 pipeline in January, he said.

The company began the commissioning sequence for ethane startup in December, the spokesman said.

Natural gas liquids exports out of the U.S. East Coast are expected to increase significantly, with ethane to be exported out of Sunoco Logistics’ Marcus Hook terminal for the first time, industry sources told OPIS in early December 2015.

Besides first export of ethane, the Marcus Hook terminal will be able to load NGL barrels on large LPG tankers, Very Large Gas Carriers. A VLGC is able to transport up to 83,000 cubic meters of NGL. This East Coast export outlet will help relieve the U.S. NGL supply glut, and the VLGCs loaded at Marcus Hook are expected to deliver NGL to Asia.

Currently, the Marcus Hook terminal is loading only Handysize LPG carriers, which have a capacity of 21,000 cbm. It could also possibly load the medium-size LPG carriers with a capacity of 40,000 cbm.

The terminal in Pennsylvania, which has an NGL storage capacity of 2 million bbl for propane and butane in underground caverns, began to export NGL about two years ago. The terminal had first received NGL in limited volumes via unit trains, but the west-east supplies increased substantially following the startup of Mariner East 1 at the end of 2014. However, international sales are limited to propane for now.

Sunoco Logistics will complete a project to increase the NGL loading rate to a maximum of 24,000 bph for VLGC as well as an ethane storage facility to enable ethane export in about one month’s time. This will unlock the full NGL export potential at Marcus Hook.

The Marcus Hook terminal receives NGL from the Marcellus Shale region via pipeline, marine vessel, truck and rail. The Mariner East 1 pipeline is rated at about 70,000 b/d, but the current flow rate is significantly below the maximum capacity due to the inability to export ethane.

However, the pipeline is expected to ramp up its NGL delivery to near maximum to facilitate the first ethane export. The total NGL export volume out of Marcus Hook will be well above 70,000 b/d due to additional deliveries via other modes of transportation.

The two main NGL exporters at Marcus Hook are MarkWest and Range Resources, which are committed shippers on Mariner East 1. It is noted Marathon Petroleum is aiming to take over MarkWest.

Besides acquiring MarkWest, Marathon has been eyeing other potential NGL export expansions on the East Coast, but details are sketchy, sources said.

Marcus Hook is one of two export outlets on the East Coast, with the other being DCP’s Chesapeake terminal in Virginia.

The East Coast exported about 1.766 million bbl of propane in September, the highest monthly volume ever, according to the Energy Information Administration. However, that export volume dropped to 1.058 million bbl in October.

In the longer run, East Coast NGL exports are expected to soar in 2017 when Sunoco Logistics completes and starts up its Mariner East 2 Expansion Project.

Sunoco Logistics plans to add a second natural gas liquids pipeline to its current Marine East 2 project, raising the total delivery capacity from western Pennsylvania, West Virginia and eastern Ohio to Philadelphia to a potential 675,000 b/d, including the original Mariner East line that is now in service.

The first NGL line, Mariner East 1, which was a refined products line converted to NGL service, is to deliver up to 70,000 b/d of propane and ethane.

The total NGL delivery capacity for the Northeast is significantly higher than the original plan for 275,000-b/d of new capacity on the Mariner East 2 line.

Meanwhile, Sunoco Logistics will have a total 800,000 bbl of new above-ground storage tank capacity at Marcus Hook. The cyrogenic ethane tank will have a 300,000-bbl capacity, and the propane tank will have 500,000 bbl. These tanks will facilitate the first ethane export and higher NGL exports.

Sunoco Logistics is building four new additional storage tanks for ethane, propane and butane at Marcus Hook to accommodate the extra NGL delivery volume on Mariner East 2, the company spokesman said.

However, the company has not publicized the storage capacity for the four new tanks yet, he said.

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