Monday, March 28, 2011

Sunoco Logistics plans to convert pipeline to ethane transport

PHILADELPHIA, Pa. - Sunoco Logistics Partners L.P. of Philadelphia announced plans on March 22 to convert an existing pipeline to deliver ethane from Marcellus Shale drilling areas to industrial customers in Ontario, Canada.

Sunoco Logistics, the pipeline affiliate of Sunoco Inc., said it would join with MarkWest Liberty Midstream & Resources L.L.C. to develop the project. MarkWest Liberty is a partnership between MarkWest Energy Partners L.P. and the Energy & Minerals Group, an investment fund.

The partnership will use new and existing pipelines to transport up to 65,000 barrels a day of ethane from Western Pennsylvania to petrochemical customers in Sarnia, Ontario.

Marcellus wells in southwestern Pennsylvania produce a sidestream of high-value liquid hydrocarbons such as ethane, butane and propane, which must be separated at plants operated by companies such as MarkWest, a Colorado firm.

Ethane is a major ingredient in ethylene, which is used to produce plastics.

The companies declined to estimate the project's cost or earnings projections. Thomas P. Golembeski, Sunoco's spokesman, said the project was expected to go online in the third quarter of 2012.

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