First shipment of Marcellus Shale ethane to sail from Marcus Hook to Norway

The first shipment of Marcellus Shale ethane will set sail from Marcus Hook to Norway, next month. This will launch a new export trade for the Delaware River port that is being hailed as a boost to the gas industry, local maritime interests, and European manufacturing, as per http://www.philly.com. Sunoco Logistics Partners L.P. has committed US$2.5 billion to the Mariner East pipeline network to transport ethane and other liquid fuels, such as propane and butane, across Pennsylvania from the Marcellus fields to that Marcus Hook terminal, erected on the site of a former oil refinery. The 300-mile system, now undergoing testing, will begin its first deliveries of ethane in the coming weeks, Sunoco says. European chemical producer INEOS has spent US$1 billion to complete the link between Marcus Hook and Europe by creating a "virtual pipeline" of 575-foot tankers to ferry ethane across the Atlantic to petrochemical plants in Norway and Scotland. "The start of ethane shipments on Mariner East 1 represents the next phase of the project and a re-orienting of the Marcellus and Utica Shale resources to benefit Pennsylvanians directly, through local use, while strengthening the state's economy through access to other markets, both domestic and international," Sunoco Logistics spokesman Jeffrey P. Shields has been reported by http://www.philly.com. "We have seen how U.S. shale gas revolutionized U.S. manufacturing, and we believe these huge ships will help do the same for Europe," British industrialist Jim Ratcliffe, founder and chairman of INEOS, said when the first two of eight tankers were launched in July. The Chinese-built INEOS tankers will load up at Marcus Hook and deliver cargo to plants whose current ethane supplies are dwindling from depleted North Sea oil wells. The INEOS plant in Grangemouth, Scotland's largest industrial complex, now operates at half-capacity. A second, parallel Mariner East pipeline, set to be built this year and opposed by many landowners along the route, would quadruple the capacity of Marcellus liquids moving to Marcus Hook. When the pipeline is ready, European petrochemical maker Borealis is poised to ship ethane to a Swedish plant. Eventually, maritime officials project, ethane may add up to 100 more tankers a year to Delaware River traffic. One pipeline, called Mariner West, now exports ethane from Pennsylvania through Ohio and Michigan to Sarnia, Ontario, where Nova Chemicals converted a plant to consume Marcellus ethane. Mariner East, the second ethane route, is an 8-inch-diameter pipeline stretching from the Pittsburgh area to Marcus Hook. It once delivered gasoline and diesel refined at Marcus Hook to Western Pennsylvania. Last year, Sunoco Logistics began shipping propane through the Mariner East line. The added infrastructure it needed to transport and store ethane is now completed, including a 300,000-barrel above-ground insulated tank in Marcus Hook supercooled to minus-130 degrees to maintain the ethane in a liquid state. Sunoco Logistics is adding one and maybe a second 24-inch- diameter pipeline next to the first Mariner East pipeline, which will require it to expand its right-of-way. It recently opened an office in Chester County to persuade reluctant landowners there and in Delaware County to sign easements. The Mariner East 2 project would expand the capacity to move Marcellus liquids from 70,000 barrels a day to 340,000 barrels. Though much of the material will be exported, some propane is distributed to local markets. And Sunoco says it also is developing a plant in Marcus Hook that would convert propane into propylene, also a building-block commodity in the petrochemical industry.