Ohio Valley Utica Gas Running In Automobiles, MarkWest Hopeful For Ethane Crackers
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CANTON, Ohio -- Many Ohio motorists are burning fuel drawn from Belmont, Harrison, Jefferson and Monroe counties in their automobile gas tanks in the form of condensate extracted from the Utica Shale, Marathon Petroleum Corp. officials said.
Also, during a Thursday tour of Marathon and MarkWest Energy facilities in Eastern Ohio, officials said about 250 people now work at the MarkWest natural gas processing plants in Cadiz and Hopedale, some of whom formerly worked in the steel or mining industries.
MarkWest now blends much of its ethane into the commercial methane stream for marketing as natural gas, while the firm sends the rest of its ethane out of the region via the ATEX Express pipeline or the Mariner East 1 pipeline. However, officials said Royal Dutch Shell's Pennsylvania ethane cracker, as well as the planned Dilles Bottom PTT Global Chemical plant, would greatly benefit the entire industry and region.
Last year, Marathon's offshoot, MPLX, paid about $20 billion to acquire the MarkWest infrastructure in Harrison County. Despite a global slowdown in drilling to low prices, the company shows no signs of slowing development in Ohio.
"The Utica and the Marcellus (shales) are the most prolific plays in the entire world," Jason Stechschulte, commercial development manager for MPLX, said. "The low prices are pushing development toward the wet gas. You are starting to see more permitting in the wet areas."
MarkWest and Ethane
MarkWest operates the Cadiz and Hopedale plants in Harrison County, the Seneca station in Noble County, the Majorsville complex in eastern Marshall County, and the Mobley site in Wetzel County.
The company refines gas streams for drillers by separating dry methane from natural gas liquids such as ethane, propane and butane so that all products can go to market.
Dave Ledonne serves as vice president of operations for MarkWest's Utica and Appalachia division.
"We're looking forward to Shell and PTT. We've got enough (ethane) in this basin to support them -- safe to say," Ledonne said. "The cracker plants are the end game. They are what we really need."
Ledonne said many of the 250 employees at the MarkWest Harrison County sites formerly worked for companies such as Wheeling-Pittsburgh Steel Corp. or Weirton Steel Corp. He said the training that many of these workers received in their former occupations is applicable to the their new careers.
To explain the process MarkWest uses in Harrison County, a turbocharger pumps air into an engine to increase horsepower, while the "turbo expander" at MarkWest's cryogenic plant in Cadiz lowers the pressure of the gas stream to separate the gases.
The dry methane and the ethane are removed from the gas stream at Cadiz. However, the propane, butane, isobutane and other heavier natural gas liquids flow via pipeline from Cadiz to the Hopedale fractionator for further separation.
Cornerstone Pipeline
Marathon's $250 million Cornerstone Pipeline entered operation Thursday. The 16-inch diameter pipeline can carry up to 180,000 barrels of light liquid hydrocarbons such as condensate and pentanes from the Harrison County MarkWest facilities to the Marathon refinery near Canton, Ohio.
"It will be much safer in a pipeline than it is in a truck, on a railcar or on a barge," Stechschulte said of the liquid material.
Stechschulte said some property owners need to understand they have to respect the right-of-way agreement once it is signed because repairs are occasionally needed.
"Someone will build a swimming pool or a shed over the pipeline. They aren't too happy when we have to come and say, 'You can't build that there,'" he said.
Marathon, Gasoline
Once the Utica condensate arrives at the Canton plant, some of it can be directly blended into the gasoline stream. Joshua Dorfmuller, the refinery's operations manager, said the facility now handled 25,000 barrels of Utica condensate each day.
"With the Utica right in our backyard, there is an opportunity to take advantage of that," he said. "We can blend the lighter portion directly into the gasoline, while the heavier elements go for further processing."
Overall, the plant refines 93,000 barrels of oil and/or condensate each day. Stechschulte said the condensate is comparable in composition to crude oil drawn from the Bakken Shale in North Dakota.
Regarding the depressed oil and natural gas price environment, which leads to lower production levels, Stechschulte said the company sees a bright future.
"We have a big system here. Once production picks up, we'll be ready for it," he said.