Pipeline Will Run To Gulf Coast
MOUNDSVILLE – More ethane, propane, butane and other forms of natural gas liquids would be shipped from the Upper Ohio Valley to the Gulf Coast via the planned Bluegrass Pipeline.
The project is a joint venture between Boardwalk Pipeline Partners and Williams Partners, which gathers and processes gas for numerous companies, including Gastar Exploration and Trans Energy. Williams operates several processing facilities in Marshall County, including the Fort Beeler plant along U.S. 250 and the fractionator along the Ohio River south of Moundsville.
“In turn, this will help producers in Ohio, Pennsylvania and West Virginia achieve an attractive value for their ethane and other liquids,” said Alan Armstrong, president and chief executive officer of Williams. “We are designing Bluegrass Pipeline to provide these two world-class resource plays with access to one of the largest and most dynamic petrochemical markets in the world.”
The new project would accompany Chesapeake Energy’s plans to send 75,000 barrels of ethane produced from the Marcellus and Utica shale regions for cracking along the Gulf Coast on the soon-to-open ATEX Express pipeline.
Because there is no ethane cracker in the Utica and Marcellus regions, some companies are already shipping the product for cracking in other regions. Others are simply burning it off via flaring, according to Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association.
“We would like to be able to use this resource for something more than making smoke in the air. We are flaring off enough ethane already that we could probably supply an ethane cracker,” said DeMarco. “I do not think there is any lack of supply.”
Houston, Texas-based Appalachian Resins recently announced it would like to build an ethane cracker in Marshall County that would bring about $500 million worth of investment and as many as 125 permanent full-time jobs. DeMarco and other industry leaders have emphasized their belief that such a project can happen in West Virginia, despite plans by some companies to ship ethane out of the region for cracking.
The proposed Bluegrass Pipeline would send 200,000 barrels per day of mixed ethane, propane and butane to the Gulf Coast, but the capacity could be increased to 400,000 barrels per day, pending demand. Williams and Boardwalk hope to have the project in service by late 2015. Boardwalk plans to file an application with the Federal Energy Regulatory Commission by May 1.
“The current infrastructure challenge with natural gas liquids in the Northeast is slowing drilling and isolating liquids supplies from the robust markets in the Gulf that are poised to grow substantially over the next five years,” Armstorng added.
Plans call for pipelines that would transport the liquids from producing areas in West Virginia and Ohio, to a transmission system in Hardinsburg, Ky., where they would then connect to another transport system to Eunice, La. The proposal also calls for a processing plant to be built in Louisiana.
“We believe that the unique arrangement of this planned project would create several strategic advantages, including a faster in-service date complemented by a significantly reduced construction footprint than could be achieved with a completely organic project,” added Stan Horton, president and chief executive officer of Boardwalk.